Andrea, who is a head of household and in the 37% tax bracket, is interested in reducing

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Andrea, who is a head of household and in the 37% tax bracket, is interested in reducing her taxes. She is considering several alternatives. For each alternative listed below, indicate how much tax for 2023, if any, she would save? (For this problem, ignore the additional 3.8% tax.)

a. Give \($2,000\) to a charity. Assume she itemizes.

b. Give \($2,000\) to a charity. Assume she does not itemize.

c. Make a gift of bonds valued at \($8,000\) yielding \($600\) of interest annually to her 15-yearold daughter who has no other income.

d. Sell the bonds from part c for \($8,000\) and buy tax-exempt bonds yielding \($300\).


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Pearsons Federal Taxation 2024 Individuals

ISBN: 9780138238100

37th Edition

Authors: Mitchell Franklin, Luke E. Richardson

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