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:
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
- Calculate the taxable income and the income tax for the corporation and for Lucy and Jason.
- What is the total tax liability for the corporation and the individuals?
- 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.
- What is the total tax liability for the LLC and the individuals?