Question: In 2 0 2 4 , Aurora received a $ 2 5 , 0 0 0 bonus computed as a percentage of profits. In 2

In 2024, Aurora received a $25,000 bonus computed as a percentage of profits. In 2025, Aurora's employer determined that the 2024 profits had been incorrectly computed, and Aurora had to refund the $8,000 in 2025. Assume that Aurora was in the 35% tax bracket in 2024 but in the 12% bracket in 2025.

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