Jana is a shareholder in Jasmine Company, a partnership. Her share of the business's current ordinary business income was $250,000. She received no guaranteed payments and a $100,000 cash distribution from the business on December 1. Assuming that Alice's marginal tax rate is 37%, calculate her after-tax cash flow from the business this year. Ignore self-employment taxes and assume she is not eligible for the Section 199A deduction.  a. 92,500 b. 100,000 c. 7,500 d. 63,000

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter15: Taxing Business Income
Section: Chapter Questions
Problem 14CE
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Jana is a shareholder in Jasmine Company, a partnership. Her share of the business's current ordinary business income was $250,000. She received no guaranteed payments and a $100,000 cash distribution from the business on December 1. Assuming that Alice's marginal tax rate is 37%, calculate her after-tax cash flow from the business this year. Ignore self-employment taxes and assume she is not eligible for the Section 199A deduction. 

a.

92,500

b.

100,000

c.

7,500

d.

63,000

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