Cooper Company has $275,000 in net income for 2015 before deducting any compensa

Question

Cooper Company has $275,000 in net income for 2015 before deducting any compensation or other payment to its sole owner, Sheldon is single and has no dependents. He claims the $6,300 standard deduction, and his personal exemption is $4,000 for 2015. Sheldon company is Sheldon's only source of income. Ignoring any employment tax considerations, compute Sheldon's after-tax income if: Cooper Company is a proprietorship and Sheldon withdraws $50, 000 from the business during the year. Cooper Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Sheldon Cooper Company is a C corporation and the corporation pays Sheldon a salary of $174,000

Explanation / Answer

a) After tax income= net income -standard deduction-person exemption

=275,000-6,300-4,000=$264,700

b)after tax income=275,000

c)after tax income=174,000-6300-4000=$163,700

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