Ahmad is considering making a $10,000 investment in a venture whose promoter promises will generate immediate tax benefits for him. Ahmad, who normally itemizes his deductions, is subject to a 32% marginal tax bracket. If the investment is of a type where the taxpayer may claim either a tax credit of 25% of the amount of the expenditure or an itemized deduction for the amount of the investment, what treatment is likely most beneficial to Ahmad, and by how much will Ahmad's tax liability decline because of the investment? O $1,200, take the itemized deduction. $2,500, take the tax credit Os Both options produce the same benefit. 4 50, take ither the itemized deduction nor the tax credit.

Andrea would like to organize SHO as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 11 percent annual before-tax return on a $350,000 investment. Andrea’s marginal income tax rate is 35 percent and her tax rate on dividends and capital gains is 15 percent. Andrea will also pay a 3.8 percent net investment income tax on dividends and capital gains she recognizes. If Andrea organizes SHO as an LLC, Andrea will be required to pay an additional 2.9 percent for self-employment tax and an additional 0.9 percent for the additional Medicare tax. Further, she is eligible to claim the full deduction for qualified business income. Assume that SHO will pay out all of its after-tax earnings every year as a dividend if it is formed as a C corporation. (Do not round intermediate calculations and round your final answers to the nearest whole dollar.)   a. How much cash after taxes would Andrea receive from her investment in…

Troy graduated in civil engineering from Concordia two years ago and decided to work in the remote area of northern Quebec. He is making great money and saving it all. What is Troy's average rate of tax if in 2021 he paid taxes of $58,232.74 on his gross income earned of $135,000? (ignore Non-Refundable Tax Credits, Quebec Abatement, and any employer withholdings) A 43.14% В 38.09% 49.97% D 33.29% 29.35%

Jana just found out that she is going to receive an end-of-year bonus of $40,000. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $40,000 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term?  Give typing answer with explanation and conclusion

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Asok's AGI for 2023 is $133,250. Included in this AGI is a $45,000 25% long-term capital gain and a $13,000 0%/15%/20% long-term capital gain. Asok is single and uses the standard deduction. Compute his taxable income, the tax liability, and the tax savings from the alternative tax on net capital gain. Click here to access the tax rate schedules to use for this problem. When computing the tax on the gain, calculate each part separately, rounding interim calculations to two decimal places. Then, round your final answer for the tax to the nearest dollar. Hint: The 25% gain is calculated at two different rates. • Asok's taxable income: $ • His regular tax liability: $ 120,850 X 23,084 X • His tax liability using the alternative tax approach: $ • The tax savings from using the alternative tax approach: $ 21,914 X 1,170

Moni and Bille Waka are in the 25 percent tax bracket, considering both federal and state personal taxes. Norman Briggs, the CEO of Community General Hospital, has been aggressively pursuing a contribution from them of $500,000 to the hospital's soon-to-be-built Cancer Care Center. With the contribution, the Wakas' taxable income would be $3,000,000. What would be the Wakas' tax without the contribution on their tax bill? Just enter a number, 5 instead of $5; the system will consider $5 as an alphanumeric entry and will consider it 0 which could result in a wrong answer if the answer is not 0.

Renee has two options:(1) She is 25 and her marginal tax rate is 32%. She is planning to invest $5,000 per year into her RRSP until she retires at 65. The money will be invested in a Canadian ETF that is expected to return 10% per year. Assume that she will withdraw her RRSP in one lump sum at 65 and that the marginal tax rate at 65 is 50%.                        (2) OR Instead of (1), she would use the $5,000 per year to service an interest-only investment loan to create her self-created tax shelter. The rate of interest on the loan is 6%. She will invest the money in the same Canadian ETF that earns 10%. The expected rate of return of 10% on the mutual fund is all capital gains and no dividends. Required :(a)    How much money will she have after taxes if she invests in the RRSP? (b)    How much money will she have after taxes if she invests in the tax shelter? (c)    In (2), if the expected rate of return on the mutual fund is only 6% , how much money after taxes will she have at…