Taxpayer A earned $ 50,000 working as a carpenter during the year. Taxpayer B, also a carpenter by trade, worked the entire year renovating her house. Comment on the after tax position of both carpenters. Does it matter if taxpayer B plans to live in her house for 1 more year versus 10 more years?
Answer to relevant QuestionsA taxpayer is forming a new corporation and has $ 500,000 to invest in her company. Following the advice of her tax consultant, the taxpayer designated $ 300,000 for the purchase of corporate stock and $ 200,000 as a loan to ...In analyzing the conversion decision in Equation 3.9, we assumed that any tax due on the conversion would be paid in the year of the conversion. For 1998 only, the taxpayer could elect to spread the tax (more specifically, ...Why do rising tax rates make single premium deferred annuities and pension accounts less attractive relative to ordinary money market accounts than when tax rates are falling? Suppose a taxpayer, when 25 years old, made one tax deductible $ 2,000 contribution of her after tax salary to a deductible IRA. Her investment (taxable corporate bonds) earned a 12% annual return, and she liquidates the ...In comparing the deductible IRA with the Roth IRA, we assumed that any excess funds left after investing the maximum pretax dollars in a deductible IRA were invested in an SPDA. How would the comparison change if the excess ...
Post your question