Bob is a movie start earning millions of dollars last year as an actor. He is...

Bob is a movie start earning millions of dollars last year as an actor. He is also a 40% active owner in a nightclub business. He participates in the management and whenever he is available Bob performs playing clarinet at the club once a weekend. Last year (2019) the nightclub earned $100,000 after paying all bills including paying the owners fair compensation for their services. However the nightclub did not pay any of this income out to the owners.

What tax or taxes must Bob pay due to his ownership if the business was organized as a) a partnership b) an S Corporation or c) a C Corporation

Expert Solution

Taxes Bob would pay due to his ownership in the business in different scenarios is as follows

1) Partnership- In case of partnership, the partnership themselve is not charged to any taxes instead the partners in the firm pay taxes on the share of income received from the partnership. So the remuneration Bob earns i.e his movie earning, performance at nightclub and the earning from partnership will be taxed through his personal tax return.

2) S Corporation- S Corporation is similar to partnership. The income and expenses earned through the entity will be taxed to the owner personal tax return though they file a separate informational federal return. The advantage of S corporation is it provides the owner the limited liability protection against business creditors.

3) C Corporation- C Corporation is a separate taxable entity. Hence Bob will pay tax for the income earned from the movie and performance at nightclub through his personal tax return and the income earned from the nightclub will be paid through C corporation return.

ekkarill92 answered 2 years ago

bob Katz has saved $22,000 annually for the last 30 years in an account earning 8%....

bob Katz has saved $22,000 annually for the last 30 years in an account earning 8%. if bob estimates that he will live for 25 years during his retirement, how much would he withdraw annually at 6% interest

End of year two, sami withdrew 3200 dollars, and he deposited 2100 dollars end of year three. compute the last two payments.

sami is planning on buying a car after five years. the current price of the car is 50,000 dollars and inflation rate is 3 percent. sami currently has 11,000 dollars in a bank account that pays an annual interest rate of 8 percent, compounded semi-annually. he wants to save for the balance by making semi annual payments in the account, at the end of each period. 1.compute the amount of the paymentsEnd of year two, sami withdrew 3200 dollars, and...

Bob deposits $11000 at the beginning of each year for six years in a fund earning...

Bob deposits $11000 at the beginning of each year for six years in a fund earning an effective annual rate of 6.7%. The interest from this fund can only be reinvested at an effective annual rate of 2.1%. Find the accumulated value of Bob’s investment at the end of thirteen years. Round your answer to the nearest cent.

Mr. Khalid, has completed his engineering degree last year and he is planning to start a...

Mr. Khalid, has completed his engineering degree last year and he is planning to start a business. His idea is to produce and sell office furniture to clients. But, he has some concern regarding the supply of this product. As an economics student, explain him about the various factors that affect the supply of his product. In your explanation, include ten most important factors affecting supply. [Answer in 300 – 400 words] pls your own words and without copying from...

Bob, who is a close friend, has decided to start his own consulting firm. He has...

Bob, who is a close friend, has decided to start his own consulting firm. He has received conflicting information regarding the best business structure to reduce his tax liability. He will be the only employee; however, he is willing to consider creating an S-Corporation. Compare and contrast the benefits of Corporations, LLCs and S-Corps and make a recommendation regarding which would be the most advantageous for Bob. Defend your position. Please provide me some additional information that is not already...

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)

Rhodes Corporation: Income Statements for Year Ending December 31 (Millions of Dollars) 2018 2017 Sales $7,800.0 $6,000.0 Operating costs excluding depreciation 5,850.0 5,100.0 Depreciation and amortization 216.0 180.0 Earnings before interest and taxes $1,734.0 $720.0 Less Interest 168.0 129.0 Pre-tax income $1,566.0 $591.0 Taxes (40%) 626.4 236.4 Net income available to common stockholders $939.6 $354.6 Common dividends $846.0 $284.0 Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars) 2018 2017 Assets Cash $90.0 $72.0 Short-term investments 39.0 30.0...

Rhodes Corporation: Income Statements for Year EndingDecember 31(Millions of Dollars)20202019Sales$...

Rhodes Corporation: Income Statements for Year Ending December 31(Millions of Dollars)20202019Sales$12,000$11,000Operating costs excluding depreciation10,5209,674Depreciation and amortization380350 Earnings before interest and taxes$1,100$976Less interest240200 Pre-tax income$860$776Taxes (25%)215194Net income available to common stockholders$645$582Common dividends$205$200Rhodes Corporation: Balance Sheets as of December 31 (Millions of Dollars)20202019AssetsCash$450$400Short-term investments110100Accounts receivable2,7502,500Inventories1,3501,200 Total current assets$4,660$4,200Net plant and equipment3,7503,500Total assets$8,410$7,700Liabilities and EquityAccounts payable$900$800Accruals450400Notes payable356200 Total current liabilities$1,706$1,400Long-term debt900800 Total liabilities$2,6062,200Common stock4,1644,300Retained earnings1,6401,200 Total common equity$5,804$5,500Total liabilities and equity$8,410$7,700Suppose the federal-plus-state tax corporate tax is 25%. Answer the following questions.net operating profit after taxes (NOPAT) for 2020...

Companies spend millions, if not billions of dollars on marketing every year. Pick a company that...

Companies spend millions, if not billions of dollars on marketing every year. Pick a company that does significant marketing and is a public company. You will need to look up the company’s annual report to find the total amount spent on marketing for the last calendar year (20XX). Once you find the information from the company’s website and annual report, explain the number and what the company reported spending the money on. Do some mathematical comparisons, total revenue as compared...

In US, the mean weekly earning of male works was $1005 last year. A random sample...

In US, the mean weekly earning of male works was $1005 last year. A random sample of 50 female workers, their weekly earnings also last year in dollars are provided in the following table. 560 360 688 1301 49 582 751 4131 3211 646 1312 1931 764 297 232 699 88 364 1111 427 1235 494 3430 298 245 448 785 1931 994 152 875 920 826 756 440 448 295 646 896 353 619 887 1079 59 219 1019...

bob buys a property for $140,000. He is offered a 25-year loan by the bank, at...

bob buys a property for $140,000. He is offered a 25-year loan by the bank, at an interest rate of 6.88% per year. What is the annual loan payment Dan must make? ________. A businessman wants to buy a truck. The dealer offers to sell the truck for either $145,000 now, or 7 yearly payments of $24,000. What interest rate would make these two options financially equivalent?

Question