Maris Corporation put into service $ 100,000 of equipment that qualifies for its state’s 10 percent research credit. To the extent that the credit is claimed, no cost-recovery deductions are allowed. Maris is subject to a 14 percent cost of capital. If the credit were not claimed, the property would qualify for cost-recovery deductions using a three-year life, straight line with no salvage value, and a half-year convention. The state has a flat income tax rate of 8 percent. What is the net value of the tax credit to Maris Corporation?
Answer to relevant QuestionsIt is late 2014, and you are a successful executive working in New York for a large company. Tomorrow morning you will have the opportunity to negotiate receiving a $ 100,000 bonus at the end of the year or an amount of ...Name two types of tax traps and give an example of each. Should the IRS audit more or fewer returns every year? What issues would you consider in this regard if you were a politician? A wealthy individual? Distinguish between the receipt of a 30-day letter and a 90-day letter. What techniques other than the random selection of returns for audit does the IRS use in its enforcement function?
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