Questions from Individual Taxation

Q: Hugh has the choice between investing in a City of Heflin bond

Hugh has the choice between investing in a City of Heflin bond at 6 percent or a Surething bond at 9 percent. Assuming that both bonds have the same nontax characteristics and that Hugh has a 40 perce...

Q: Using the facts in the previous problem, what interest rate does

Using the facts in the previous problem, what interest rate does Surething, Inc. need to offer to make Hugh indifferent between investing in the two bonds?

Q: The IRS recently completed an audit of Shea’s tax return and assessed

The IRS recently completed an audit of Shea’s tax return and assessed $15,000 additional tax. Shea requested an appeals conference but was unable to settle the case at the conference. She is contempla...

Q: Fergie has the choice between investing in a State of New York

Fergie has the choice between investing in a State of New York bond at 5 percent and a Surething bond at 8 percent. Assuming that both bonds have the same nontax characteristics and that Fergie has a...

Q: Using the facts in the previous problem, what interest rate does

Using the facts in the previous problem, what interest rate does the state of New York need to offer to make Fergie indifferent between investing in the two bonds?

Q: Given the following tax structure, what minimum tax would need to

Given the following tax structure, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to average tax rates?

Q: “The goal of tax planning is to minimize taxes.” Explain

“The goal of tax planning is to minimize taxes.” Explain why this statement is not true.

Q: Using the facts in the previous problem, what minimum tax would

Using the facts in the previous problem, what minimum tax would need to be assessed on Shameika to make the tax progressive with respect to effective tax rates?

Q: Song earns $100,000 taxable income as an interior designer

Song earns $100,000 taxable income as an interior designer and is taxed at an average rate of 20 percent (i.e., $20,000 of tax). If Congress increases the income tax rate such that Song’s average tax...

Q: Using the facts from the previous problem, what will happen to

Using the facts from the previous problem, what will happen to the government’s tax revenues if Song chooses to spend more time pursuing her other passions besides work in response to the tax rate cha...