a. Tax savings = Donation*Tax Rate = 2,200*27% = 594
b. Future Value = Tax Saving *(1+Rate)^{6} =
594*(1+7%)^{6}= 594 * 1.501 = 891.59
Please Discuss in case of Doubt
Best of Luck. God Bless
Please Rate Well
Problem 3-14 (LO3.4) Assume your other itemized deductions exceed the standard deduction amount. On December 30,...
Future value of five years 8% = 1.469 On December 30, you decide to make a $1,000 charitable donation a. If you are in the 20.5 percent federal tax bracket, how much will you save in taxes for 2016? Assume that amounts in excess of $200 do not exceed 75 percent of Net income. (Omit the "$" sign in your response.) Tax savings for the current year$ b. If you deposit that tax savings in a savings account for the...
Assume your other itemized deductions exceed the standard deduction amount. On December 30, you decide to make a $1,800 charitable donation. a. If you are in the 27 percent tax bracket, how much will you save in taxes for the current year? Tax savings b. If you deposit that tax savings in a savings account for the next five years at 8 percent, what will be the future value of that account? Use Exhibit 1-A. (Round time value factor to...
You are trying to decide whether to use the $12,200 standard deduction or your itemized deductions (Schedule A) on your Form 1040, Line 9. Here is your information: Adjusted Gross Income $40,000 Medical Expenses $15,000 Interest on Student Loan $2,000 Interest on Home Mortgage $3,000 State and Local Income Taxes Paid $1,500 Charitable Gifts (in total) $1,000 Which deduction should you choose? A Itemized Deduction of $17,500 B. Itemized Deduction of $10,500 C. Itemized Deduction of $22,500 D. Standard...
Problem 3-43 (LO. 9) Each year, Tom and Cindy Bates (married filing jointly) report itemized deductions of $20,000 (which includes an annual $4,000 pledge payment to their church). Upon the advice of a friend, they do the following: In early January 2019, they pay their 2018 pledge; during 2019, they pay the 2019 pledge; and in late December 2019, they prepay their 2020 pledge. a. What are the Bateses trying to accomplish? b. What would the Bates' total itemized deductions...
Let's assume your marginal tax rate is 24% and you claim the standard deduction because you do not have enough itemized deductions. How much tax savings would each of the following items provide? (Round answers to 0 decimal place, e.g. 5275.) a. $1,000 refundable tax credit. $ b. $1,000 nonrefundable tax credit. $ C. $1,000 FOR AGI deduction. 1 ी ी d. $1,000 FROM AGI deduction.
Problem 3-52 (LO.9) Each year, Tom and Cindy Bates (who file married-filing jointly) report itemized deductions of $10,000, induding an annual $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: In early January 2017, they pay their 2016 pledge; during 2017, they pay the 2017 pledge; and in late December 2017, they prepay their 2018 pledge. a. What are the Bateses trying to accomplish? b. What would the Bates total itemized deductions be...
Problem 10-36 (LO. 6, 8) In December of each year, Eleanor Young contributes 10% of her gross income to the United Way (a 50% organization). Eleanor, who is in the 24% marginal tax bracket, is considering the following alternatives for satisfying the contribution. Fair Market Value $23,000 $23,000 (1) Cash donation (2) Unimproved land held for six years ($3,000 basis) (3) Blue Corporation stock held for eight months ($3,000 basis) (4) Gold Corporation stock held for two years ($28,000 basis)...
Problem 10-36 (Algorithmic) (LO. 6, 8) In December each year, Eleanor Young contributes 10% of her gross income to the United Way (a 50% organization). Eleanor, who is in the 24% marginal tax bracket, is considering the following alternatives for satisfying the contribution. (1) Cash donation (2) Unimproved land held for six years ($6,810 basis) (3) Blue Corporation stock held for eight months ($6,810 basis) (4) Gold Corporation stock held for two years ($54,480 basis) Fair Market Value $45,400 $45,400...
Problem 2-13 (LO2.4) Brenda plans to reduce her spending by $90 a month. What would be the future value of this reduced spending over the next 10 years? (Assume an annual deposit to her savings account, and interest rate of 4 percent.) Use Exhibit 1.B. (Round time value factor to 3 decimal places and final an annual answer to 2 decimal places.) Future value
In December each year, Eleanor Young contributes 10% of her gross income to the United Way (a 50% organization). Eleanor, who is in the 28% marginal tax bracket, is considering the following alternatives for satisfying the contribution. Fair Market Value (1) Cash donation $169,000 (2) Unimproved land held for six years ($25,350 basis) $169,000 (3) Blue Corporation stock held for eight months ($25,350 basis) $169,000 (4) Gold Corporation stock held for two years ($202,800 basis) $169,000 Eleanor has asked you...