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 16, Problem 7AP
Mrs. Yue, a resident of Virginia, paid $50,000 for a bond issued by Pennsylvania that paid $3,400 interest this year. Her marginal state income tax rate is 6 percent. Under Virginia law, interest on debt obligations issued by another state is taxable. Mrs. Yue can deduct state income tax on her Form 1040, and her marginal federal income tax rate is 24 percent. Compute her after-tax
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Minda, resident citizen, invested in a 6-year bond issued by a local bank. The bond was issued by the bank to more than 20 persons in the public and complied with legal requirements. Minda earned a total of P2,000 interest on the instrument for the current period. How much is the final tax on the interest?
Mrs. Nunn, who has a 24 percent marginal tax rate on ordinary income, earned $3,670 interest on a debt instrument this year.
Required:
Compute her federal income tax on this interest assuming that the debt instrument was:
Note: For all requirements, round your final answers to the nearest whole dollar amount. Leave no cells blank - be certain to enter
"0" wherever required.
a. An unsecured note from her son, who borrowed money from his mother to finance the construction of his home.
b. A certificate of deposit from a federal bank.
c. A 30-year General Electric corporate bond.
d. A U.S. Treasury note.
e. A City of Memphis municipal bond.
a. Federal income tax
b. Federal income tax
c. Federal income tax
d. Federal income tax
e. Federal income tax
Amount
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.
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…
Chapter 16 Solutions
Principles Of Taxation For Business And Investment Planning 2020 Edition
Ch. 16 - Contrast the income tax consequences of the yields...Ch. 16 - Prob. 2QPDCh. 16 - Mrs. Buckley, age 74, has 100,000 in a certificate...Ch. 16 - Ms. Quint sadly concluded that a 7,500 debt owed...Ch. 16 - Prob. 5QPDCh. 16 - Prob. 6QPDCh. 16 - Discuss the potential effect of the passive...Ch. 16 - Prob. 8QPDCh. 16 - Prob. 9QPDCh. 16 - Prob. 10QPD
Ch. 16 - Prob. 11QPDCh. 16 - Prob. 1APCh. 16 - Mr. and Mrs. Lays taxable income is 679,000, which...Ch. 16 - Dianne Stacy, a single taxpayer, has 272,000...Ch. 16 - Prob. 4APCh. 16 - Mrs. Nunn, who has a 24 percent marginal tax rate...Ch. 16 - Refer to the preceding problem and assume that...Ch. 16 - Mrs. Yue, a resident of Virginia, paid 50,000 for...Ch. 16 - Ms. Pay, who has a 40.8 percent marginal tax rate...Ch. 16 - Mr. Jolly received the 100,000 face amount on the...Ch. 16 - Prob. 10APCh. 16 - Prob. 11APCh. 16 - Prob. 12APCh. 16 - Prob. 13APCh. 16 - Fifteen years ago, Mr. Fairhold paid 50,000 for a...Ch. 16 - Refer to the facts in the preceding problem....Ch. 16 - Prob. 16APCh. 16 - Prob. 17APCh. 16 - Three years ago, Mrs. Gattis loaned 10,000 to Mr....Ch. 16 - Prob. 19APCh. 16 - Prob. 20APCh. 16 - Mrs. Beard recognized a 12,290 capital loss on the...Ch. 16 - Prob. 22APCh. 16 - Prob. 23APCh. 16 - Mr. and Mrs. Revel had 206,200 AGI before...Ch. 16 - Prob. 25APCh. 16 - Mr. Fox, a single taxpayer, recognized a 64,000...Ch. 16 - Mrs. Cox, a head of household, earned a 313,000...Ch. 16 - Prob. 28APCh. 16 - Prob. 29APCh. 16 - Mr. Dunn, who has a 32 percent marginal rate on...Ch. 16 - Prob. 31APCh. 16 - Prob. 32APCh. 16 - Prob. 33APCh. 16 - Prob. 34APCh. 16 - Prob. 35APCh. 16 - Prob. 36APCh. 16 - Ms. Turney owns a one-half interest in an...Ch. 16 - Prob. 38APCh. 16 - Prob. 39APCh. 16 - Prob. 40APCh. 16 - Mr. Erwins marginal tax rate on ordinary income is...Ch. 16 - Prob. 42APCh. 16 - Prob. 43APCh. 16 - Prob. 44APCh. 16 - Prob. 45APCh. 16 - Mrs. Wolter, an unmarried individual, owns...Ch. 16 - Prob. 1IRPCh. 16 - Prob. 2IRPCh. 16 - Prob. 3IRPCh. 16 - Prob. 4IRPCh. 16 - Prob. 5IRPCh. 16 - Two years ago, Ms. Eager loaned 3,500 to her...Ch. 16 - Prob. 7IRPCh. 16 - This year, Ms. Tan had a 29,000 capital loss...Ch. 16 - Prob. 9IRPCh. 16 - Mr. Pugh has a 7,900 adjusted basis in his limited...Ch. 16 - Prob. 11IRPCh. 16 - Mr. Durst died on March 8. His taxable estate...Ch. 16 - Prob. 13IRPCh. 16 - Prob. 1RPCh. 16 - Prob. 2RPCh. 16 - Prob. 1TPCCh. 16 - Ms. Kaspari, who has a 24 percent marginal rate on...Ch. 16 - Prob. 3TPCCh. 16 - Prob. 4TPC
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