Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could endow the scholarship with $500,000 cash or with $500,000 worth of marketable securities with a cost basis of $318,000. Assume the taxable year is 2022. Required: If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates for capital gains and qualified dividends. Note: Enter your answers in dollars not in millions of dollars. After-tax cost Cash Securities
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- On June 30, 2019, Kelly sold property for 240,000 cash and a 960,000 note due on September 30, 2020. The note will also pay 6% interest, which is slightly higher than the Federal rate. Kellys cost of the property was 400,000. She is concerned that Congress may increase the tax rate that will apply when the note is collected. Kellys after-tax rate of return on investments is 6%. a. What can Kelly do to avoid the expected higher tax rate? b. Assuming that Kellys marginal combined Federal and state tax rate is 25% in 2019, how much would the tax rates need to increase to make the option identified in part (a) advisable?The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 24% Federal income tax bracket and the 8% state income tax bracket (i.e., an aggregate marginal tax bracket of 32%). Assume that the Wilmoths will benefit from itemizing their deductions for both Federal and state purposes. The total cash outlay during the first year of ownership will be $25,200 ($2,520 principal payments, $22,680 qualified residence interest payments). If required, round your interim calculation to nearest dollar. As a result, the annual after-tax cost of financing the purchase of the home will be $Your client has an adjusted gross income this year of $40,000. She would like to reduce her income taxes. She plans to contribute $20,000 during the year to the American Cancer Society, a qualified public charity. To maximize the current year income tax deduction, which of the following is the most appropriate property for the client to transfer to the charity? A)Some stock, held short term, valued at $20,000 with a basis of $8,000 B)A stamp collection, held long term, valued at $20,000 with a basis of $9,000, which the American Cancer Society will dispose of upon receipt C)A life insurance policy, with a replacement cost of $20,000, on which she has paid net premiums of $5,500 D)An interest in a parcel of commercial real estate, held long term, with a fair market value of $20,000 and a basis of $15,000
- The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable income, the Wilmoths are in the 24% Federal income tax bracket and the 8% state income tax bracket (i.e., an aggregate marginal tax bracket of 32%). Assume that the Wilmoths will benefit from itemizing their deductions for both Federal and state purposes. The total cash outlay during the first year of ownership will be $23,400 ($1,200 principal payments, $22,200 qualified residence interest payments). If required, round your interim calculation to nearest dollar. As a result, the initial year after-tax cost of financing the purchase of the home will be $fill in the blank 1Your client has an adjusted gross income this year of $40,000. She would like to reduce her income taxes. She plans to contribute $20,000 during the year to the American Cancer Society, a qualified public charity. To maximize the current year income tax deduction, which of the following is the most appropriate property for the client to transfer to the charity? A)Some stock, held short term, valued at $20,000 with a basis of $8,000 B)A stamp collection, held long term, valued at $20,000 with a basis of $9,000, which the American Cancer Society will dispose of upon receipt C)A life insurance policy, with a replacement cost of $20,000, on which she has paid net premiums of $5,500 D)An interest in a parcel of commercial real estate, held long term, with a fair market value of $20,000 and a basis of $15,000 Correct answer.Anita Walsh is considering an additional charitable contribution of $1,500 to a tax-deductible charity, bringing her total itemized deductions to $16,000. If Anita is in a 24 percent tax bracket, how much will this $1,500 contribution reduce her taxes? Show your work please and cite any sources used. thank you
- In 2020, Jessica bought a new heavy truck for $45,000 to use 80% for her sole proprietorship. Total miles driven include 12.000 in 2020, 14,500 in 2021, and 13,000 in 2022. (Use Table 6A-1) Required: a. If Jessica uses the standard mileage method, how much may she deduct on her 2022 tax return (miles were incurred ratably throughout the year)? b. What is the deduction for 2022 assuming the actual method was used from the beginning? Calculate depreciation only; the truck is not limited by the luxury auto rules. Also, assume $179 was not elected in the year of purchase. a b. DeductionQ3 Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could endow the scholarship with $557,500 cash or with $557,500 worth of marketable securities with a cost basis of $334,500. Assume the taxable year is 2021. Required: If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates for capital gains and qualified dividends. (Enter your answers in dollars not in millions of dollars.) After-tax cost: Cash /SecuritiesRamon had AGI of $181,000 in 2022. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable charitable contribution deduction in each of the following independent situations, and indicate the treatment for any amount that is not deductible currently. Identify any planning ideas to minimize Ramon's tax liability. a. A cash gift of $90,500. In the current year, Ramon may deduct $(. )since his charitable contribution is limited to $(. ) b. A gift of OakCo stock worth $90,500 on the contribution date. Ramon had acquired the stock as an investment two years ago at a cost of $81,450. The stock's value for determining the contribution is $f(. ). The deduction for 2021 is $(. )The remaining $(. ) for fill in the blank 1a2a96f96fad03a_5 years. c. A gift of a painting worth $90,500 that Ramon purchased three years ago…
- In 2022, Elaine paid $2,800 of tuition and $600 for books for her dependent son to attend State University this past fall as a freshman. Elaine files a joint return with her husband. What is the maximum American opportunity tax credit that Elaine can claim for the tuition payment and books in each of the following alternative situations? Required: Elaine's AGI is $80,000. Elaine's AGI is $168,000. Elaine's AGI is $184,000.The Liu Trust is short of cash. It is required to distribute $100,000 to Yang every year, and that payment is due in six weeks. In its asset corpus, Liu holds a number of investments that are valued at $100,000. One of them is a plot of land with a tax basis to the trust of $80,000. Assuming that the trust agreement allows, what are the Federal income tax consequences if Liu distributes this land to Yang? If an amount is zero, enter "0". Without a § 643(e) election:DNI and distribution deduction is $.Gross income to Liu is $.Basis to Yang is $. With a § 643(e) election:DNI and distribution deduction is $.Gross income to Liu is $.Basis to Yang is $.