Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. 21. juan was considering purchasing an interest in

21. Juan was considering purchasing an interest in a tax-exempt bond fund for $ 100,000...

50.1K

Verified Solution

Question

Accounting

imageimage

21. Juan was considering purchasing an interest in a tax-exempt bond fund for $ 100,000 when he discovered that the interest must be included on his state income tax return. The interest rate is 5 %. His marginal Federal tax rate is 35%, and his marginal state income tax rate is 10%. Juan itemizes his deductions on his Federal income tax return. As an alternative, Juan can purchase a state bond (a double-exempt bond) yielding 4.9% interest that is exempt from both Federal and state income tax. Which investment would yield the greater after-tax return? 22. Al is single, age 60, and has gross income of $ 140,000. His deductible expenses are as follows: Alimony (divorce finalized in 2017) Charitable contributions Contribution to a traditional IRA Expenses paid on rental property Interest on home mortgage and property taxes on personal residence State income tax $20,000 4,000 5,500 7,500 7,200 2,200 What is Al's AGI? a. $ 94,100. b. $ 103,000. C. $ 107,000. d. $ 127,000. e. None of these

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students