Lucy Lindsey began a consulting business on 1/1/2016. Her business

Question: Lucy Lindsey began a consulting business on 1/1/20…

Lucy Lindsey began a consulting business on 1/1/2016. Her business is organized as a C (Regular Corporation) called L & L, Inc. Lucy owns 100% of the company’s stock.

L & L, Inc.

Income and expense information for 2016:

Revenues 1020000

Operating expenses 870000

Qualified dividend paid to Lucy during year 100000

Lucy did not receive any salary from the business. Lucy and Jason Lindsey (married, filing joint return; no children)

Other information for 2016:

Jason’s salary as a sales manager for a car dealership 142000

Total itemized deductions for couple 28000

1. Calculate the taxable income and the income tax for the corporation and for Lucy and Jason.
2. What is the total tax liability for the corporation and the individuals?
3. Assume that Lucy’s business was organized as an LLC rather than as a C corporation. The revenue and expense information is the same as that above. Lucy received a distribution of $100,000 from the LLC. The couple’s other income and deductions are unchanged.
4. What is the total tax liability for the LLC and the individuals?