Question: Jeff and Ed form The Tax Museum as a corporation. They each own 50% of the stock. Neither is employed by the corporation. In the first year of operation, the corporation generates $1 million of taxable income and pays $200,000 in dividends ($100,000 each to Jeff and Ed). Assuming a 21% corporate tax rate, a 35% personal tax rate on ordinary income, and a 15% personal tax rate on dividends, how much tax will be paid in the first year?