What is the reasoning behind the tax laws which allow investors of municipal bonds to not pay federal income tax on the interest received?

Q: What are the special tax features of (a) Treasury securities, (b) agency issues, and (c) municipal…

A: (a): Treasury securities - Interest paid on all types of treasury securities will be fully taxable…

Q: Which constitutes a taxable item of gross income? * O Compensation for personal injuries Gain from…

A: Compensation for injuries or sickness, Income exempt under treaty, Gains from redemption of shares…

Q: Which is an incorrect statement regarding taxes? *       a. Taxes are necessary for the continued…

A: Taxes are the compulsory fees or financial charge imposed by the government on the taxpayers.

Q: How does our tax system influence the use of debt financing by corporations?

A: Answer: If a company uses debt financing, it will pay interest while if it uses stock, dividends are…

Q: A corporation's taxable income is taxed at the federal, state, and local levels.  It is customary…

A: Solution Tax rate is the rate which specified the amount of income that has been paid as a tax.

Q: en that private corporations can select any date within the year as their year-end date, when is the…

A: Companies are given the choice of the fiscal year and they can choose as per convenient.

Q: Is it ethical for state and city governments to entice specific businesses to relocate their…

A: A business entity has complete freedom to operate their business in any state and city, irrespective…

Q: A corporation's taxable income is taxed at the federal, state, and local levels.  It is customary…

A: Solution Tax liability means a sum paid by the individual, firm ,company in the form of tax to to…

Q: What Issue do President Biden’s proposal have on the raise of corporate tax rate

A: The given question is about corporate tax rate so before moving into question first we have to know…

Q: What are child tax credits and payroll taxes? Explain the advantages and disadvantages. which…

A: Child Tax Credits  In America, child tax credits are given to every family in which dependent child…

Q: Which of the following statements is (are) correct? (x)  Part of the administrative burden of a tax…

A: A mortgage is a contract between borrower and a lender that provides the lender the right to take…

Q: Which of the following statements is true? O Interest on bonds is not tax deductible O Interest on…

A: Bonds should be repaid back at maturity  perios

Q: Which of the following is not a goal of the tax law? a.Economic goals such as reduction in…

A: Solution: Following are the goal of tax law: 1. Economic goals such as reduction in unemployment. 2.…

Q: Which of the following is correct? 1 It would be cheaper for ABCL to own and pay for the insurance…

A: The question is multiple choice question Required  Choose the Correct Option.

Q: What is the principle behind IRS tax free or tax deferred transaction

A: An individual retirement account is a financial instrument created for people to save for their…

Q: Comment on the following items relative to tax planning strategies of a fiduciary entity. To reduce…

A: The process of examining a financial position or plan to ensure that all components work together to…

Q: Briefly describe why the obligation to pay taxes for citizens who have taxable income is a form of…

A: What is Taxation?  Taxation is a not a word it means when an authority i.e respective government ,…

Q: Investor vs. trader – a very important distinction for federal income tax purposes. In reasonable…

A: Investor: Investor Hold securities to earn interest, dividend on it. Investor buy securities and…

Q: Which of the following is tax credit or tax deduction or none:   A reduction of the income subject…

A:

Q: Which of the following taxes is not deductible as an itemized deduction? a.Sales tax in a state with…

A: Non Deductible Taxes under itemized deduction: 1. federal income tax 2. Federal, state or local…

Q: How can tax law changes create incentives for investors to sell their properties to other investors?

A: Income property can be described by different means, including such leasing, as the asset bought or…

Q: Suppose a tax reform bill is enacted that causes the corporate tax rate to change from 34% to 36%.…

A:

Q: Why are high-tax-bracket investors more inclined to invest in municipal bonds than low-bracket…

A: Income earned on municipal bonds is exempt from the federal tax, state and local taxes. These are…

Q: Which of the following is tax exempt on its income earned as such?   Religious corporation…

A: Second option i.e. Non-stock, non-profit educational institution, is the correct answer.

Q: your professor has taught you that because municipal bonds (or any other tax-saving) bond would…

A: The reduction in income tax rates would make the tax-exempt privilege for municipal bonds less…

Q: In order for you to be indifferent between the after-tax returns on a corporate bond paying 9% and a…

A: After tax return on corporate bond = Return on tax exempt municipal bond

Q: Which of the following tax remedies is both beneficial to the government and taxpayer? a. Tax lien…

A: In the era of growing global economy and complexities of tax laws, tax payers quite often tends to…

Q: earnings below a certain threshold are taxed. What is your opinion on the fairness of this tax?

A: social security tax is such type of tax in which a percentage of the gross wages that most of the…

Q: What are the constitutional limitations on the State's power to tax

A: Constitution of the United States: The Constitution of the United States is the preeminent law of…

Q: These are involuntary fees levied on individuals or corporations and imposed by the government…

A: Excise taxes are taxes levied on specified goods. These are indirect taxes that the consumer may not…

Q: Which among the type of taxes (national or local) do you think can be reduced, removed, or revised…

A: Taxes are an importance source of revenue for the governments to spend on infrastructure. But at the…

Q: Is the corporate tax schedule progressive? Why or why not?

A: A tax schedule can either regressive or progressive. It depends upon how the scehdule has been…

Q: Why are disclosures about deferred taxes useful to identify the ways in which publicly-traded…

A: Here discussion about the disclosure about the benefits which are availed in the form of relief in…

Q: hat are some ways taxpayers can stay up to date on the federal, state and local tax laws applicable…

A: It is important for taxpayers to be aware of the various taxes applicable on them so that there is…

Q: Withholding is: b. A method by which the government collect taxes at the time of its A method of…

A: Taxes are the dues and liabilities which needs to be paid by the individual to the government on…

Q: The interest paid by municipal bonds is not subject to federal income taxation.  a. True    b. False

A: Municipal bonds also called as Muni bonds is a bond which is issued by the state governments, local…

Q: A temporary difference that would not result in a deferred tax asset but not a permanent difference?…

A: Solution: A temporary difference that would not result in a deferred tax asset but not a permanent…

Q: What is the statute of limitations for income tax returns

A: Given: The concept of a statute of limitations for the income tax returns.

Q: the government and the IRS

A: The term student loan interest deduction refers to a federal income tax deduction that permits…

Q: How does the Income received from tax free government bonds effect the calculation of deferred…

A: Tax free government  bonds means those  bonds which  pays interest  which is tax free, that is not…

Q: What are municipal bonds, and how are these bonds taxed?

A: A bond is an instrument that represents the loan that is made by the investor to the company and…

Q: What is the issue with trying to abolish all property tax? Is property tax mandated by the…

A: The main source of revenue to the government is by the levy of tax on various goods, services,…

Q: Which constitutes a taxable item of gross income? * Compensation for personal injuries Gain from…

A: Gross income: Gross income is the sum of all wages, salaries, profits, interest payments, rents, and…