Maroon Company had $100,000 net profit from operations in 2008 and paid Bobbie,its sole shareholder,a dividend of $77,750 ($100,000 net profit - $22,250 corporate tax).Assume that Bobbie is in the 35% marginal tax bracket.Would Bobbie's tax situation be better or worse if Maroon Company were a proprietorship and Bobbie withdrew $77,750 from the business during the year? Explain.

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The Answer of Maroon Company had $100,000 net profit from operations in 2008 and paid Bobbie,its sole shareholder,a dividend of $77,750 ($100,000 net profit - $22,250 corporate tax).Assume that Bobbie is in the 35% marginal tax bracket.Would Bobbie's tax situation be better or worse if Maroon Company were a proprietorship and Bobbie withdrew $77,750 from the business during the year? Explain.

Maroon Company Had $100,000 Net Profit from Operations in 2008