Question 5. How much total tax is paid to the federal government?

Inez is the sole shareholder in TIP Technologies, Inc., a C-corp. TIP Tech has a banner year and makes $1,000,000 in profit. The company decides to re-invest most of this profit into the continued growth of the business, but it pays Inez a distribution of $100,000. How much total tax is paid to the federal government? (Assume a corporate tax rate of 35% and an individual tax rate of 20%.)

A. $550,000

B. $370,000

C. $350,000

D. $200,000

Правильный ответ:

B. $370,000

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