Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could endow the scholarship with $500,000 cash or with $500,000 worth of marketable securities with a cost basis of $318,000. Assume the taxable year is 2022. Required: If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates for capital gains and qualified dividends. Note: Enter your answers in dollars not in millions of dollars. Answer is complete but not entirely correct. Securities Cash $315,000 $ 133,000 X After-tax cost
Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could endow the scholarship with $500,000 cash or with $500,000 worth of marketable securities with a cost basis of $318,000. Assume the taxable year is 2022. Required: If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates for capital gains and qualified dividends. Note: Enter your answers in dollars not in millions of dollars. Answer is complete but not entirely correct. Securities Cash $315,000 $ 133,000 X After-tax cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ff.6.
Transcribed Image Text:Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could
endow the scholarship with $500,000 cash or with $500,000 worth of marketable securities with a cost basis of $318,000. Assume
the taxable year is 2022.
Required:
If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates
for capital gains and qualified dividends.
Note: Enter your answers in dollars not in millions of dollars.
X Answer is complete but not entirely correct.
After-tax cost
Cash
$ 315,000
Securities
133,000 X
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