Logan, a 50 percent shareholder in Military Gear Inc., is comparing the tax consequences of...
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Logan, a 50 percent shareholder in Military Gear Inc., is comparing the tax consequences of losses from C corporations with losses from S corporations. Assume Military Gear Inc has a $116,000 tax loss for the year, Logan's tax basis in his Military Gear Inc. stock was $158,000 at the beginning of the year, and he received $83,000 ordinary income from other sources during the year. Assuming Logan's marginal regular income tax rate is 24%, how much more tax will Logan pay currently if Military Gear Inc. is a C corporation compared to the tax he would pay if it were an S corporation?
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