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Each year, Tom and Cindy Bates normally have itemized deductions of $22,000 (which includes a $4,000 pledge payment to their

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Each year, Tom and Cindy Bates normally have itemized deductions of $22,000 (which includes a $4,000 pledge payment to their church). On the advice of a friend, they do the following: in early January 2022, they pay their pledge for 2021; during 2022, they pay their pledge for 2022; and in late December 2022, they prepay their pledge for 2023.

a. Explain what the Bateses are trying to accomplish.

b. What will be the tax savings if their marginal tax bracket is 24% for all three years? (Assume that the standard deduction amounts for 2022 and 2023 are the same.)

c. Write a letter to Tom and Cindy Bates (8212 Bridle Court, Reston, VA 20194) summarizing your analysis.

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a By concentrating the payment of three years of charitable contributions 2021 2022 and 2023 into one year the Bateses will be able to itemize their d…View the full answer


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South Western Federal Taxation 2023 Comprehensive Volume

South Western Federal Taxation 2023 Comprehensive Volume

ISBN: 9780357719688

46th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

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Question Details
Chapter # 3- Tax Formula and Tax Determination; An Overview of Property Transactions
Section: Discussion Questions
Problem: 50
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Question Posted: September 24, 2023 07:31:38
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