Corporation Business Organization Pay Income Tax

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Corporation Business Organization Pay Income Tax Questions

1.Paul, John, George and Ringo properly form a corporation.Paul and Ringo are very wealthy individuals who simply purchase stock.John and George also purchase stock in the corporation; in addition, they work for the business as president and vice-president.

a.Does the corporation pay income tax?

b.Will the four shareholders have to pay income tax?

c.Might John and George have an additional income tax burden – why/why not?

2.If the corporation above is form as a subchapter S corporation, how would your answers to each question change?

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