Larry and Ally are married and file a joint return. They are considering purchasing a personal residence that will generate two deductions: $10,000 in home mortgage interest and $8,000 in real estate taxes. Their marginal tax rate is 24%. If Larry and Ally purchase the residence, what will be the after-tax cost of the additional $18,000 in expenditures?
What will be an ideal response?
Tax savings of expenditures: ($10,000 + $8,000) × .24 = $4,320
After-tax cost:: $18,000 - $4,320 = $13,680.
You might also like to view...
The doctrine under which the trademark holder has no right to control goods after it sells them in commerce is referred to as:
a. the trademark dilution doctrine. b. the exhaustion doctrine. c. the gray market doctrine. d. the loss of control doctrine.
Which of the following characteristics of sales careers has increased due to multicultural diversity in customer segments?
A. Job predictability and vegetation B. Job variety C. Compensation D. Immediate feedback E. Advancement opportunities
A corporation can earn 7.50% if it invests in municipal bonds. The corporation can also earn 8.20% (before-tax) by investing in preferred stock. Assume that the two investments have equal risk. What is the break-even corporate tax rate that makes the corporation indifferent between the two investments? Assume a 70.00% dividend exclusion for tax on dividends. (Do not round your intermediate answer and round your final answer to two decimal places.)
A. 28.74% B. 31.02% C. 28.46% D. 27.89% E. 35.28%
Which of the following statements is true of a flextime plan?
A. It allows two or more employees to share a single full-time job. B. It makes less sense in jobs that entail extensive teamwork. C. It is extremely useful in jobs that entail extensive customer interaction. D. It tends to decrease employee morale and retention.