Question

You are a shareholder in an S corporation. The corporation earns $2.01 per share before taxes. As a pass through​ entity, you will receive $2.01 for each share that you own. Your marginal tax rate is 28%. How much per share is left for you after all taxes are​ paid?

Answer 1

To calculate the amount per share left for you after all taxes are paid, subtract the tax amount, which is 28% of the earnings per share before taxes.

Step-by-step explanation:

To calculate the amount per share left for you after all taxes are paid, we need to consider the marginal tax rate of 28%. As a pass-through entity, you will receive the full earnings per share before taxes, which is $2.01. To calculate the after-tax amount per share, we subtract the tax amount, which is 28% of $2.01. Therefore, the amount per share left for you after all taxes are paid is $2.01 - ($2.01 * 0.28) = $1.45.