Required information [The following information applies to the questions displayed below.] Tawana owns and operates a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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. c. If Jonathon worked for his mother's sole proprietorship, what salary would she have to pay him to generate $19,500 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? (Round your answer to the nearest whole dollar amount.) Salary 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. d. How much money would the strategy save? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) This strategy will save Tawana pretax and will save the family after tax. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,420,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $1,380,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate? After state taxes profit b. What is the after state taxes profit in the state with the 2% tax rate? After state taxes profit Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $30,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $36,000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $72,000 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment? Tax savings 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. c. If Jonathon worked for his mother's sole proprietorship, what salary would she have to pay him to generate $19,500 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)? (Round your answer to the nearest whole dollar amount.) Salary 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. d. How much money would the strategy save? (Round your intermediate calculations and final answers to the nearest whole dollar amount.) This strategy will save Tawana pretax and will save the family after tax. Option 1: One state has a corporate tax rate of 10 percent. If operated in this state, the plant is expected to generate $1,420,000 pretax profit. Option 2: The other state has a corporate tax rate of 2 percent. If operated in this state, the plant is expected to generate $1,380,000 of pretax profit. a. What is the after state taxes profit in the state with the 10% tax rate? After state taxes profit b. What is the after state taxes profit in the state with the 2% tax rate? After state taxes profit Daniel is considering selling two stocks that have not fared well over recent years. A friend recently informed Daniel that one of his stocks has a special designation, which allows him to treat a loss up to $30,000 on this stock as an ordinary loss rather than the typical capital loss. Daniel figures that he has a loss of $36,000 on each stock. If Daniel's marginal tax rate is 35 percent and he has $72,000 of other capital gains (taxed at 15 percent), what is the tax savings from the special tax treatment? Tax savings
Expert Answer:
Related Book For
Essentials of Federal Taxation 2019
ISBN: 9781260190045
10th edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
Students also viewed these accounting questions
-
Tawana owns and operates a sole proprietorship and has a 40 percent marginal tax rate. She provides her son, Jonathon, $8,000 a year for college expenses. Jonathon works as a pizza delivery person...
-
ABC Company manufactures vacuum cleaner with a brand name 'Cool. The company made good profits during initial 10 years; however, the profits declined due to competition from national brands. In 2020,...
-
Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $8,000 a year for college expenses. Jonathon works as a pizza delivery person...
-
Tonight at 7pm a professional basketball game featuring the Golden State Warriors and the Washington Wizards will be played at the Chase Center, an indoor arena in the Mission Bay neighborhood of San...
-
What is the role of ASN.1 in the ISO/OSI reference model 's presentation layer?
-
Find examples in the current business news media of how eBay and other online sellers obtain information about the price elasticity of demand by making unannounced temporary adjustments to their...
-
Consider the wine quality of young red wines data in Table B.19. Regressor $x_{1}$ is an indicator variable. Perform a thorough analysis of these data. What conclusions do you draw from this...
-
Several months ago, Deb Forrester received a substantial sum of money from the estate of her late aunt. Deb initially placed the money in a savings account because she was not sure what to do with...
-
Describe five common fees assessed on credit card accounts and how they can be avoided. What is the major benefit of having a credit card with a grace period?
-
Reproduced below from Farthington Supply's accounting records is the Accounts Receivable Subledger along with selected General Ledger accounts. During the year 2014, there were no recoveries of...
-
How will developing these skills benefit your future career? In crafting your response, reflect on how your proposed plan for skills development addresses at least one of the major challenges you are...
-
Determine the gravitational potential \(\mathcal{V}_{G}\) in the case of a homogeneous solid sphere of radius \(R\) as a function of \(r>R\).
-
Show that in the case described by the question 4 the point mass \(m\) inside the sphere feels no gravitational force from the spherical shell. Question 4 Show that if you have a mass \(M\)...
-
Making use of the result obtained in the question 3 , determine the gravitational potential \(\mathcal{V}_{G}\) in the case of a homogeneous solid sphere of radius \(R\) as a function of \(r \leq...
-
Verify that if \(a=p_{a}+i q_{a}\) and \(b=p_{b}+i q_{b}\) are two complex numbers, then the product of the two is the complex number. Get real and imaginary part.
-
Show that the elastic force exhibited by a bouncing ball of radius \(R\), assumed perfectly elastic, can be written as \(\mathbf{F}=-k(r-R) b \hat{f} r\) and that it admits potential energy...
-
What this does this statement mean and how to disagree? Give proper reason. connection is largely contingent: it just so happens, given the particular distributions created by this era of global...
-
Huntingdon Capital Corp. is a competitor of Plazacorp and First Capital Realty. Huntingdon reported the following selected information (in millions):...
-
Allie received a $50,000 distribution from her 401(k) account this year that she established while working for Big Stories Inc. Assuming her marginal ordinary tax rate is 24 percent, how much tax and...
-
Tiny and Tim each own half of the 100 outstanding shares of Flower Corporation. This year, Flower reported taxable income of $10,000. In addition, Flower received $20,000 of life insurance proceeds...
-
Compare and contrast 1245 recapture and 1250 recapture.
-
Taxes are paid each year on some measure of financial gain. We typically think of financial gain as cash inflows minus cash outflows, and yet simply subtracting outflows due to capital investments in...
-
True or False: The Modified Accelerated Cost Recovery System is the most popular depreciation method used in computing corporate income tax liabilities.
-
A lumber company purchases and installs a wood chipper for \(\$ 200,000\). The chipper is classified as MACRS 7-year property. Its useful life is 10 years. The estimated salvage value at the end of...
Study smarter with the SolutionInn App