Coconut, an individual, is the sole shareholder of Tropical Fruit Corporation, a U.S. based corporation. Coconut also ow
Posted: Tue Nov 16, 2021 9:31 am
Coconut, an individual, is the sole shareholder of Tropical
Fruit Corporation, a U.S. based corporation. Coconut also owns the
office building that serves as corporate headquarters for Tropical
Fruit Corporation. Last year, Tropical Fruit Corporation paid
$3,200,000 annual rent to Coconut for use of the building. Tropical
Fruit Corporation 's marginal tax rate was 21% and Coconut's
marginal tax rate on ordinary income was 37%. Also, Coconut’s
qualified dividend rate was 20%. The revenue agent who audited
Tropical Fruit Corporation's return concluded that the fair rental
value of the office building was $2,400,000. What is the net
increased amount of Coconut and Tropical Fruit Corporation's
combined income tax liability as a result of this audit
conclusion?
Group of answer choices
$136,000
$168,000
$32,000
$24,000
Fruit Corporation, a U.S. based corporation. Coconut also owns the
office building that serves as corporate headquarters for Tropical
Fruit Corporation. Last year, Tropical Fruit Corporation paid
$3,200,000 annual rent to Coconut for use of the building. Tropical
Fruit Corporation 's marginal tax rate was 21% and Coconut's
marginal tax rate on ordinary income was 37%. Also, Coconut’s
qualified dividend rate was 20%. The revenue agent who audited
Tropical Fruit Corporation's return concluded that the fair rental
value of the office building was $2,400,000. What is the net
increased amount of Coconut and Tropical Fruit Corporation's
combined income tax liability as a result of this audit
conclusion?
Group of answer choices
$136,000
$168,000
$32,000
$24,000