Brennan Frey

Business

16 October, 12:59

What is the amount of the overall tax (corporate level + shareholder level) on the $590.000 of pre-interest expense earnings if hazel, Nutt's sole shareholder lends Nutt corporation $61.500 at the beginning of the year, Nutt pays Hazel $7200 of interest on the loan (interest is considered to be reasonable), and Nutt distributes all of its after-tax earnings to hazel (ignore the net investment income tax) ? assume hazel's ordinary marginal tax rate 35 percent and her dividend tax rate is 15 percent