Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late...
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Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $31,000 bill from her accountant for consulting services related to her small business. Reese can pay the $31,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if she pays the $31,000 bill in December? After-tax cost b. What is the after-tax cost if she pays the $31,000 bill in January? Use Exhibit 3.1. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) After-tax cost Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $42,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 7 percent on his investments. a. What is the after-tax income if Hank sends his client the bill in December? After-tax income b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income Bob's Lottery Inc. has decided to offer winners a choice of $225,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be indifferent between the two choices? Use Exhibit 3.1. Amount Required information [The following information applies to the questions displayed below.] Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $19,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. b. How much pretax income does it currently take Tawana to generate the $19,500 (after-taxes) given to Jonathon? (Round your answer to the nearest whole dollar amount.) Pretax income Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $31,000 bill from her accountant for consulting services related to her small business. Reese can pay the $31,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if she pays the $31,000 bill in December? After-tax cost b. What is the after-tax cost if she pays the $31,000 bill in January? Use Exhibit 3.1. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) After-tax cost Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $42,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 7 percent on his investments. a. What is the after-tax income if Hank sends his client the bill in December? After-tax income b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income Bob's Lottery Inc. has decided to offer winners a choice of $225,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be indifferent between the two choices? Use Exhibit 3.1. Amount Required information [The following information applies to the questions displayed below.] Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $19,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. b. How much pretax income does it currently take Tawana to generate the $19,500 (after-taxes) given to Jonathon? (Round your answer to the nearest whole dollar amount.) Pretax income Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $31,000 bill from her accountant for consulting services related to her small business. Reese can pay the $31,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if she pays the $31,000 bill in December? After-tax cost b. What is the after-tax cost if she pays the $31,000 bill in January? Use Exhibit 3.1. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) After-tax cost Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $42,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 7 percent on his investments. a. What is the after-tax income if Hank sends his client the bill in December? After-tax income b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income Bob's Lottery Inc. has decided to offer winners a choice of $225,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be indifferent between the two choices? Use Exhibit 3.1. Amount Required information [The following information applies to the questions displayed below.] Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $19,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. b. How much pretax income does it currently take Tawana to generate the $19,500 (after-taxes) given to Jonathon? (Round your answer to the nearest whole dollar amount.) Pretax income Reese, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December, she received a $31,000 bill from her accountant for consulting services related to her small business. Reese can pay the $31,000 bill anytime before January 30 of next year without penalty. Assume Reese's marginal tax rate is 32 percent this year and 35 percent next year, and that she can earn an after-tax rate of return of 11 percent on her investments. a. What is the after-tax cost if she pays the $31,000 bill in December? After-tax cost b. What is the after-tax cost if she pays the $31,000 bill in January? Use Exhibit 3.1. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.) After-tax cost Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $42,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 7 percent on his investments. a. What is the after-tax income if Hank sends his client the bill in December? After-tax income b. What is the after-tax income if Hank sends his client the bill in January? Use Exhibit 3.1. (Round your answer to the nearest whole dollar amount.) After-tax income Bob's Lottery Inc. has decided to offer winners a choice of $225,000 in 10 years or some amount currently. Assume that Bob's Lottery Inc. earns a 12 percent after-tax rate of return. What amount should Bob's offer lottery winners currently, in order to be indifferent between the two choices? Use Exhibit 3.1. Amount Required information [The following information applies to the questions displayed below.] Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $19,500 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent. b. How much pretax income does it currently take Tawana to generate the $19,500 (after-taxes) given to Jonathon? (Round your answer to the nearest whole dollar amount.) Pretax income
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a Return on investment 11 marginal tax this year 32 After tax cost11103211068748 b marginal tax thi... View the full answer
Related Book For
Essentials of Federal Taxation 2018
ISBN: 9781260007640
9th edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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