Haru is a self-employed cash-method, calendar-year taxpayer, who made the following cash payments related to his business this year. Calculate the after-tax cost of each payment assuming Haru has a 37 percent marginal tax rate. b. $3,300 of interest on a short-term loan incurred in September and repaid in November. Half of the loan proceeds was used immediately to pay salaries and the other half was invested in municipal bonds until November.
Haru is a self-employed cash-method, calendar-year taxpayer, who made the following cash payments related to his business this year. Calculate the after-tax cost of each payment assuming Haru has a 37 percent marginal tax rate. b. $3,300 of interest on a short-term loan incurred in September and repaid in November. Half of the loan proceeds was used immediately to pay salaries and the other half was invested in municipal bonds until November.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Haru is a self-employed cash-method, calendar-year taxpayer, who made the following cash payments related to his business this year.
Calculate the after-tax cost of each payment assuming Haru has a 37 percent marginal tax rate.
b. $3,300 of interest on a short-term loan incurred in September and repaid in November. Half of the loan proceeds was used immediately to pay salaries and the other half was invested in municipal bonds until November.
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