Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert's $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000. a. What is Robert's qualified business income? $ b. What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $200,000?
Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert's $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000. a. What is Robert's qualified business income? $ b. What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $200,000?
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 40P
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Robert is the sole shareholder and CEO of ABC, Inc., an S corporation that is a qualified trade or business. During the current year, ABC has net income of $325,000 after deducting Robert's $100,000 salary. In addition to his compensation, ABC pays Robert dividends of $250,000.
a. What is Robert's qualified business income?
$
b. What is Robert's qualified business income if you determined that reasonable compensation for someone with Robert's experience and responsibilities is $200,000?
$
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