PFIN 7:STUDENT EDITION-TEXT
7th Edition
ISBN: 9780357033616
Author: Billingsley
Publisher: CENGAGE L
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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…
Suppose that Ana is preparing to file her taxes. She is single and currently lives in Denver. Ana 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
12.0
Ana calculates that she owes
22.0
24.0
32.0
35.0
37.0
Based on the IRS table, Ana calculates that her marginal tax rate is
in income taxes for 2022.
when her annual taxable income is $110,000.
Ana then calculates that her average tax rate is, based on the annual income level and the amount of taxes she owes for 2022.
After figuring out what she owes in taxes in 2022, Ana decides to ask an accountant for tax advice. The accountant claims that he has found a legal
way to shelter $2,000 of taxable income from the federal government.
The…
Chapter 3 Solutions
PFIN 7:STUDENT EDITION-TEXT
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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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2019 gross income: a. On September 30, 2019, she cashed in Series EE bonds for 10,000. She purchased the bonds in 2009 for 7,090. The yield to maturity on the bonds was 3.5%. b. On July 1, 2018, she purchased a CD for 10,000. The CD matures on June 30, 2020, and will pay 10,816, thus yielding a 4% annual return. c. On July 1, 2019, she purchased a CD for 10,000. The maturity date on the CD was June 30, 2020, when Marlene would receive 10,300.arrow_forwardDetermine the taxpayers gross income for tax purposes in each of the following situations: a. Deb, a cash basis taxpayer, traded a corporate bond with accrued interest of 300 for corporate stock with a fair market value of 12,000 at the time of the exchange. Debs cost of the bond was 10,000. The value of the stock had decreased to 11,000 by the end of the year. b. Deb needed 10,000 to make a down payment on her house. She instructed her broker to sell some stock to raise the 10,000. Debs cost of the stock was 3,000. Based on her brokers advice, instead of selling the stock, she borrowed the 10,000 using the stock as collateral for the debt. c. Debs boss gave her two tickets to the Rabid Rabbits rock concert because she met her sales quota. At the time she received the tickets, each ticket had a face price of 200 and was selling on eBay for 300. On the date of the concert, the tickets were selling for 250 each. Deb and her son attended the concert.arrow_forward
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