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Mason (single) is a 50 percent shareholder in Angels Corp. (an S Corporation). Mason receives a $180,000 salary working full time for Angels Corp. Angels Corp. reported $400,000 of taxable business income for the year (2020). Before considering his business income allocation from Angels and the self-employment tax deduction (if any), Mason’s adjusted gross income is $180,000 (all salary from Angels Corp.).

Required:
What is Mason’s net investment income tax liability (assume no investment expenses)?

Respuesta :

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Answer:

$6,840

Explanation:

Given that:

Mason receives a salary amount of  $180,000

Taxable business income = $400,000 × 50%

Adjusted Gross Income    = $180,000 + $200000

Adjusted Gross Income    = $380000

The net investment income tax liability is:

= (380000 -200000) × 3.8%

= 180000 × 3.8%

= $6,840

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