Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN: 9780357033609
Author: Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher: Cengage Learning
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Textbook Question
Chapter 3, Problem 3FPE
Calculating taxes on security transactions. If Julia Diaz is single and in the 24 percent tax bracket, calculate the tax impact of each of the following security transactions. (Use the IRS regulations for
- a. She sold stock for $1,200 that she purchased for $1,000 5 months earlier.
- b. She sold bonds for $4,000 that she purchased for $3,000 3 years earlier.
- c. She sold stock for $1,000 that she purchased for $1,500 15 months earlier.
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If Isabella Rodriguez is single and in the 22 percent tax bracket, calculate the tax associated with each of the following transactions. (Hint: Use the IRS regulations for capital gains in effect in 2018.)
Treat each of the following cases as independent of the others. Tax savings should be preceded by a "-" sign. Round the answers to the nearest cent.
She sold stock for $3,025 that she purchased for $2,500 3 months earlier.
$
She sold bonds for $3,000 that she purchased for $2,500 3 years earlier.
$
She sold stock for $3,080 that she purchased for $4,000 20 months earlier. Assume this to be the only Stock in Isabella's portfolio.
$
2. Taxes paid for a given income level
Suppose that Maria is preparing to file her taxes. She is single and currently lives in Miami. Maria earned $110,000 in taxable income in 2022. She
reviews the following table, which shows the IRS tax rates for a single taxpayer in 2022.
On Annual Taxable Income...
Up to $10,275
From $10,275 to $41,775
From $41,775 to $89,075
From $89,075 to $170,050
From $170,050 to $215,950
From $215,950 to $539,900
Over $539,900
The Tax Rate Is...
(Percent)
10.0
Maria calculates that she owes
12.0
22.0
24.0
32.0
35.0
37.0
Based on the IRS table, Maria calculates that her marginal tax rate is
in income taxes for 2022.
Maria then calculates that her average tax rate is
when her annual taxable income is $110,000.
based on the annual income level and the amount of taxes she owes for 202
After figuring out what she owes in taxes in 2022, Maria decides to ask an accountant for tax advice. The accountant claims that he has found a legal
way to shelter $2,000 of…
Sarah owns a jewelry store and prepares her financial statements using the accrual method of accounting. However, she completes her Schedule C on her individual income tax return using the cash method. Given the following accrual method information from the income statement and balance sheet, determine her business net income under the cash method for tax reporting purposes.
Accrual method net income $40,000
Beginning accounts receivable $60,000
Ending accounts receivable $37,000
Beginning accounts payable $24,000
Ending accounts payable $30,000
Sarah owns a jewelry store and prepares her financial statements using the accrual method of accounting. However, she completes her Schedule C on her individual income tax return using the cash method. Given the following accrual method information from the income statement and balance sheet, determine her business net income under the cash method for tax reporting purposes.
Accrual method net income $40,000
Beginning accounts receivable…
Chapter 3 Solutions
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
Ch. 3 - Discuss the basic principles of income taxes and...Ch. 3 - Prob. 2LOCh. 3 - Prob. 3LOCh. 3 - Explain who needs to pay estimated taxes, when to...Ch. 3 - Know where to get help with your taxes and how...Ch. 3 - Implement an effective tax planning strategy.Ch. 3 - Calculating marginal tax rates. Lacey Hansen is...Ch. 3 - Estimating taxable income, tax liability, and...Ch. 3 - Calculating taxes on security transactions. If...Ch. 3 - Prob. 4FPE
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