Your client's federal marginal tax rate is 36%, and the state marginal rate is 7%. The client does not itemize deductions on his federal tax return and is considering investing in a municipal bond issued in his state of residence which yields 5%. What is his taxable equivalent yield? 3.20% 4.65% 5.38% 7.81% 8.77%

Your client's federal marginal tax rate is 36%, and the state marginal rate is 7%. The client does not itemize deductions on his federal tax return and is considering investing in a municipal bond issued in his state of residence which yields 5%. What is his taxable equivalent yield? 3.20% 4.65% 5.38% 7.81% 8.77%

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 51P

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Use the following information to calculate the federal average tax rate (ignore tax credits) for a taxpayer who earned $115,000 from employment, and where bonds were sold for $20,000 during the year that originally cost $10,000: Taxable income Up to $47,630 On the next $47,629 On the next $52,408 On the next $62,704 Over $210,371 Select one: Tax Rate 15% 20.5% Based on the above, the average tax rate (ATR) is closest to: a. 19.15% b. 19,45% c. 20.5% d. 26.0% 26% 29% 33%
Chuck a single taxpayer earns $78,000.00 in taxable income and $13, 300.00 in interest from an investment in city of heflin bonds. 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?
The taxpayer's marginal federal and state tax rate is 25%. Which would the taxpayer prefer? a.$1.00 taxable income rather than $.75 tax-exempt income. b.$1.25 taxable income rather than $1.00 tax-exempt income. c.$1.40 taxable income rather than $1.00 tax-exempt income. d.$1.00 taxable income rather than $1.25 tax-exempt income.
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.)
Taxpayer Y, who has a 30 percent marginal tax rate, invested $65,000 in a bond that pays 8 percent annual interest. Compute Y’s annual net cash flow from this investment assuming that a. The interest is tax-exempt income.b. The interest is taxable income.
4.An individual made $85,000 for the year. Using the tax given , answer the following questions: A.What is this person's marginal tax rate? B.How much tax does this person owe? C.What is the effective tax rate?
Suppose a taxpayer can time when they receive a $100,000 distribution from a pre-tax 401(k) retirement account (this tax year or next). If they wait until next year, they will earn 10% on the account. The distribution is fully taxable at the marginal tax rate of the taxpayer, which is 24% for this year. What would be the marginal tax rate NEXT YEAR to just make the distribution financially advantageous this tax year? Enter your response as a whole number percent without the "%" sign and using 5/4 rounding (25.67% = 26).
es Chuck, a single taxpayer, earns $77,800 in taxable income and $11,500 in interest from an investment in City of Heflin bonds. (Use the U.S tax rate schedule.) Required: a. How much federal tax will he owe? b. What is his average tax rate? c. What is his effective tax rate? d. What is his current marginal tax rate? Complete this question by entering your answers in the tabs below. Required A Required B Federal tax Required C How much federal tax will he owe? Note: Do not round intermediate calculations. Round "Federal tax" to nearest whole dollar amount. $ Required D 12,424
Monica’s expected cash payment to a seller is $640,000 and her marginal tax rate is 32%. Monica will receive tax savings from the payment (if there are any) at the time of the payment. What is Monica’s ATCF if the payment is 40% tax deductible? A. ($558,100) B. ($640,000) C. ($256,000) D. ($384,000)
You already understand that, given a choice between a $1,000 tax deduction and a $1,000 tax credit, you would opt for the credit every time. But how about as be-tween above-the-line (“for AGI”) and below-the-line (“from AGI”) deductions? As between a $1,000 “for AGI” deduction and a $1,000 itemized / “from AGI” deduction, which would you generally prefer to have, and why? Note: As CPAs we’re big on time-efficiency, so we’re also big on acronyms. It takes way too long to say (or type) “adjusted gross income.” We prefer “AGI” instead.
Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates? (Round your final answer to nearest whole dollar amount.) Muni-Bond Total Tax Salary $ 10,000 $ 50,000 Тахраyer Interest $ 600 $ 10,000 $ 30,000 Mihwah Shameika ??? Minimum tax
You understand that, given a choice between a $1,000 tax deduction and a $1,000 tax credit, you would opt for the credit every time. But how about as be-tween above-the-line (“for AGI”) and below-the-line (“from AGI”) deductions? As between a $1,000 “for AGI” deduction and a $1,000 itemized / “from AGI” deduction, which would you generally prefer to have, and why?