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Unformatted text preview: Name: Mary Hannah ACCT 4230 Chapter 1 Date: 6/6/2011 Problem I: Edward and Emily Jones are married and file a joint return. They anticipate having taxable income of $240,000 in the next year and are considering whether or not to purchase a personal residence. The residence would provide Ed and Emily with additional tax deductions for mortgage interest and real estate taxes of $50,000. a. personal exemptions or other itemized deductions. 16,500 b. taxable income without the deductions relative to the residence and the tax on their taxable income considering the increased deductions. 190000 240000-137300-209250 52700 30750 * .28 * .33 14756 10147.50 56981.00 26687.5 46833.5-41443.5 41443.5 56981.00 15537.50 Calculate the effective Federal tax rate applicable to the tax savings. (Tax savings associated with deduction/deduction) Considering the 2010 tax rates, what is their marginal tax rate for purposes of making this decision ? Do not consider the effects of Calculate their tax savings using the 2010 tax rate schedule . Calculate the tax on th Tax savings $ 15,538...
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This note was uploaded on 07/24/2011 for the course ACCT 4243 taught by Professor Greene during the Spring '11 term at Cogswell.
- Spring '11