1) An owner takes $35,000 out of her business as a salary for 2012. Compare the income and FICA or self-employment tax burdens of an individual who owns a business that has operating income of $60,00

1) An owner takes $35,000 out of her business as a salary for 2012. Compare the income and FICA or self-employment tax burdens of an individual who owns a business that has operating income of $60,000 if the business is

a. a C corporation

b. a sole proprietorship

2) Taxpayer B has the following gains and losses from property transactions.

Long-term capital gain $5,000

Long-term capital loss 8,000

Section 1231 gain 11,000

Section 1231 loss 9,000

Short-term capital gain 2,000

Short-term capital loss 4,000

What is the effect on the taxpayer’s taxable income if Taxpayer B is:

a. a C corporation?

b. an individual?

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