Principles Of Taxation For Business And Investment Planning 2020 Edition
23rd Edition
ISBN: 9781259969546
Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan
Publisher: McGraw-Hill Education
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Chapter 3, Problem 1IRP
To determine
Identify the tax issues and state the issues in the form of question.
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Students have asked these similar questions
Peter's gross income is $80,000 a year, and Wendy earns $100,000 a year. They put $3,000
each into an IRA. They are a married couple and have two children, so that they can have a child
tax credit $2,000 per child. Peter and Wendy decided to file taxes jointly, and this year standard
deduction for married taxpayers is $24,400.
a. How much is the gross income?
b. How much is the adjusted gross income (AGI)?
c. How much is the taxable income?
d. How much do they have to pay in taxes? (Total tax payment)
e. Suppose that the government withheld $16,000 from Peter's earnings and $20,000 from
Wendy's. What is the final payment (refund) due?
Marginal tax rate
if married, filling jointly
37
35
32
24
22
12
10
19,400 78,950
168,400
321,450
408,200
612,350
Taxable Income
|| |
"Mr. and Mrs. Jerald own a dry cleaning business that generates $125,000 taxable income each year. For the past few years, the couple’s federal tax rate on this income has been 32 percent. Congress recently increased the tax rate for next year to 40 percent.
Based on a static forecast, how much additional revenue will the federal government collect from Mr. and Mrs. Jerald next year?
How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working harder and earning $140,000 next year?
How much additional revenue will the government collect if Mr. and Mrs. Jerald respond to the rate increase by working less and earning only $110,000 next year?
"
Charles and Martha (both age 30), cach saved $15,000 (pre tax) at the end of every year over their working lives. Both worked till age 65 years. Charles saved his
money in a qualified pension plan while Martha saved in her personal account after paying taxes. Martha turned over her portfolio every year and the combination
of ordinary income on dividends and interest and capital gains on sale of stock came to a 20% tax rate on investment retums. If both generated a pretax retum of 6%
per year and were in 25% marginal tax bracket throughout their lives, compute the difference in their net accumulated savings at retirement
$167,137
O $278,654
$222,849
O $696.535
Chapter 3 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 3 - Does the NPV of future cash flows increase or...Ch. 3 - Explain the relationship between the degree of...Ch. 3 - Does the after-tax cost of a deductible expense...Ch. 3 - Prob. 4QPDCh. 3 - Prob. 5QPDCh. 3 - Prob. 6QPDCh. 3 - Prob. 7QPDCh. 3 - Which type of tax law provision should be more...Ch. 3 - In the U.S. system of criminal justice, a person...Ch. 3 - Identify two reasons why a firms actual marginal...
Ch. 3 - Prob. 11QPDCh. 3 - Prob. 12QPDCh. 3 - Prob. 1APCh. 3 - Prob. 2APCh. 3 - Prob. 3APCh. 3 - Use a 5 percent discount rate to compute the NPV...Ch. 3 - Consider the following opportunities: Opportunity...Ch. 3 - Prob. 6APCh. 3 - Refer to the income tax rate structure in the...Ch. 3 - Prob. 8APCh. 3 - Company N will receive 100,000 of taxable revenue...Ch. 3 - Prob. 10APCh. 3 - Investor B has 100,000 in an investment paying 9...Ch. 3 - Firm E must choose between two alternative...Ch. 3 - Company J must choose between two alternate...Ch. 3 - Firm Q is about to engage in a transaction with...Ch. 3 - Corporation ABC invested in a project that will...Ch. 3 - Prob. 16APCh. 3 - Investor W has the opportunity to invest 500,000...Ch. 3 - Prob. 18APCh. 3 - Prob. 19APCh. 3 - Prob. 20APCh. 3 - Prob. 21APCh. 3 - Prob. 1IRPCh. 3 - Firm V must choose between two alternative...Ch. 3 - Prob. 3IRPCh. 3 - Refer to the facts in problem 3. Company WB is...Ch. 3 - Prob. 5IRPCh. 3 - Prob. 6IRPCh. 3 - Prob. 7IRPCh. 3 - Prob. 8IRPCh. 3 - Prob. 9IRPCh. 3 - Prob. 1TPCCh. 3 - Firm D is considering investing 400,000 cash in a...
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