Tonya, who lives in California, inherited a $100,000 State of California bond in 2021. Her marginal Federal tax rate is 35%, she itemizes deductions on her Federal tax return, and her marginal state tax rate is 5%. The California bond pays 3.3% interest, which is not subject to California income tax. She can purchase a corporate bond of comparable risk that will yield 5.2% or a U.S. government bond that pays 4.6% interest. What is the after-tax income from each bond? California bond: $ Corporate bond: $ U.S. government bond: $
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- Tammy, a resident of Virginia, is considering purchasing a North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. She is aware that State of Virginia bonds of comparable risk are yielding 4.5%. However, the Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Which of the two options will provide the greater after-tax return to Tammy? Tammy can deduct any state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is 100,000.Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2019 gross income: a. On September 30, 2019, she cashed in Series EE bonds for 10,000. She purchased the bonds in 2009 for 7,090. The yield to maturity on the bonds was 3.5%. b. On July 1, 2018, she purchased a CD for 10,000. The CD matures on June 30, 2020, and will pay 10,816, thus yielding a 4% annual return. c. On July 1, 2019, she purchased a CD for 10,000. The maturity date on the CD was June 30, 2020, when Marlene would receive 10,300.Dana intends to invest $66,000 in either a Treasury bond or a corporate bond. The treasury bond yields 5 percent before tax, and the corporate bond yields 6 percent before tax. Assume Dana's federal marginal rate is 24 percent and she itemizes deductions. a-2. How much interest after-tax would Dana earn by investing in the corporate bond? b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose? b-2. How much interest after-tax would Dana earn by investing in the corporate bond as per requirement b-1?
- Katie, a resident of Virginia, is considering purchasing a $100,000 North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. She is aware that State of Virginia bonds of comparable risk are yielding 4.5%. However, the Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Katie can deduct any state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is $100,000. If required, round your computations and answers to the nearest dollar. Assume that Katie itemizes her deductions for federal taxes. Determine the after tax income from each bond. Virginia Bond: $fill in the blank 1 North Carolina Bond: $fill in the blank 2Ms. Zelda has decided to invest $75,000 in state bonds. She could invest in State A bonds paying 5 percent annual interest or in State R bonds paying 5.4 percent annual interest. The bonds have the same risk, and the interest from both is exempt from federal income tax. Because Ms. Zelda is a resident of State A, she wouldn't pay State A's 8.5 percent personal income tax on the State A bond interest, but she would pay this tax on the State R bond interest. Ms. Zelda can deduct any state tax payments in the computation of her federal taxable income, and her federal marginal rate is 32 percent. Required: a. Compute Ms. Zelda's after-tax return from State A and State R bonds. 2. Should Ms. Zelda invest in the State A or the State R bonds? Complete this question by entering your answers in the tabs below. Required A Required B Compute Ms. Zelda's after-tax return from State A and State R bonds. Note: Enter costs with a minus sign. Round your intermediate computations and final answers…Assume that John's marginal tax rate is 37 percent. If a city of Austin bond pays 6.5 percent interest, what interest rate would a corporate bond have to offer for John to be indifferent between the two bonds? Question 4 Marc, & married taxpayer, earns 5640,000 in taxable income and $8,300 in interest from an investment in city of Birmingham bonds. Using the U.S. tax rate schedule for year 2022, what is his current marginal tax rate? (Use tax rate schedule.)
- Leena's marginal federal tax rate is 28%. She lives in a province where her provincial marginal tax rate is 17.2%, and the provincial dividend tax credit is 33.4% of the dividend gross up. If Leena receives an non-eligible dividend of $21,760 from a Canadian- controlled private corporation in 2019, how much will she pay in income tax?Campbell, a single taxpayer, earns $428,000 in taxable income and $3,400 in interest from an investment in State of New York bonds. (Use the U.S. tax rate schedule.) Required: How much federal tax will she owe? What is her average tax rate? What is her effective tax rate? What is her current marginal tax rate?Eunice is single and in the 24% federal and 5% state tax brackets. She is considering the purchase of amunicipal bond, issued in her state of residence, with a YTM of 6.75%. What is Eunice's tax equivalent yield on the bond? O 9.51% O 4.79% 8.87% O 6.75%
- Melinda invests $200,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $200,000 in a bond recently issued by Surething Incorporated that pays 8 percent interest and has risk and other nontax characteristics similar to the City of Heflin bond. Assume Melinda’s marginal tax rate is 25 percent. How much explicit tax would she have paid on the Surething Incorporated bond? What is her after-tax rate of return on the Surething Incorporated bond?"Ms. Zelda has decided to invest $75,000 in state bonds. She could invest in State A bonds paying 5 percent annual interest or in State R bonds paying 5.4 percent annual interest. The bonds have the same risk, and the interest from both is exempt from federal income tax. Because Ms. Zelda is a resident of State A, she wouldn’t pay State A’s 8.5 percent personal income tax on the State A bond interest, but she would pay this tax on the State R bond interest. Ms. Zelda can deduct any state tax payments in the computation of her federal taxable income, and her federal marginal rate is 32 percent. Should Ms. Zelda invest in the State A or the State R bonds?"Chuck, a single taxpayer, earns $76,000 in taxable income and $11,100 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.) Required: How much federal tax will he owe? What is his average tax rate? What is his effective tax rate? What is his current marginal tax rate?What is his average tax rate? Note: Do not round intermediate calculations. Round total tax to nearest whole dollar amount. Choose Numerator / Choose Denominator =/= Average Tax Rate / = 0