For the current year, Maple Corporation, a C corporation,reports taxable income of $397,000 before paying salary to its soleshareholder, Diane. Dianeâs marginal tax rate on ordinary income is35.9 percent (including the additional Medicare tax) and 18.8percent on dividend income (including the 3.8% net investmentincome tax). If Maple pays Diane a salary of $222,000 but the IRSdetermines that Dianeâs salary in excess of $175,000 isunreasonable compensation, what is the amount of the overall tax(corporate level + shareholder level) on Mapleâs $397,000pre-salary income? Assume Mapleâs tax rate is 35 percent and itdistributes all after-tax earnings to Diane. (Round yourintermediate calculations and final answers to the nearest wholedollar amount.)
For the current year, Maple Corporation, a C corporation,reports taxable income of $397,000 before paying salary to its soleshareholder, Diane. Dianeâs marginal tax rate on ordinary income is35.9 percent (including the additional Medicare tax) and 18.8percent on dividend income (including the 3.8% net investmentincome tax). If Maple pays Diane a salary of $222,000 but the IRSdetermines that Dianeâs salary in excess of $175,000 isunreasonable compensation, what is the amount of the overall tax(corporate level + shareholder level) on Mapleâs $397,000pre-salary income? Assume Mapleâs tax rate is 35 percent and itdistributes all after-tax earnings to Diane. (Round yourintermediate calculations and final answers to the nearest wholedollar amount.)
