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Lars Osberg, a single taxpayer with a 35 percent marginal tax rate, desires health insurance. The health insurance would cost Lars $8,500 to purchase if he pays for it himself (Lars's AGI is too high to receive any tax deduction for the insurance as a medical expense). Volvo, Lars's employer, has a 40 percent marginal tax rate. Answer the following questions about this benefit (ignore FICA taxes in your analysis).
a. What is the maximum amount of before-tax salary Lars would give up to receive health insurance from Volvo?
b. What would be the after-tax cost to Volvo to provide Lars with health insurance if it could purchase the insurance through its group plan for $5,000?
c. Assume that Volvo could purchase the insurance for $5,000. Lars is interested in getting health insurance and he is willing to receive a lower salary in exchange for the health insurance. What is the least amount by which Volvo would be willing to reduce Lars's salary while agreeing to pay his life insurance?
d. Will Volvo and Lars be able to reach an agreement by which Volvo will provide Lars's health insurance?
Prepare a memorandum that outlines the tax consequences of each of the three alternative acquisitions
Evaluate what amount of dividends must the company pay the preferred shareholders in 2009 if they wish to pay the common stockholders a dividend?
Taxable income includes a deduction for $40,000 of depreciation that exceeds the depreciation allowed for E&P purposes.
Lee Ann sells for $75 per share, and the stock is about to go ex dividend. What do you think the ex-dividend price will be?
Denise filed her 2003 tax return on February 4, 2004. There was no material understatement of income on her return and the return was property signed and filed. When will the statute of limitations expire for Denise's tax return?
Explain what the law was regarding the Family Payment system and Education Entry Payment prior to the changes put forward, and the nature of the abovementioned changes. Your explanation should indicate when these new measures will begin and cease.
Prepare income tax entries for 2005, 2006, 2007, and 2008discounting deferred tax liabilities at 8 percent. Why would using discounting be a stronger asset-liability orientation than not discounting deferred tax liabilities?
Consider the CGT consequences of the above transactions by determining whether the assets are CGT assets, collectables or personal use assets. Identify the relevant laws and apply them with appropriate details required to support your recommendat..
determine Emily’s itemized deductions. Which of these items can and cannot be listed as medical deductions? Why? What is her 2011 taxable income?
Ben included Reilly's share of the profits for the 7/31/2012 fiscal year on Reilly's Form 1040 for 2012. This is Reilly's final 1040.
Prepare a response words documenting how, as a tax analyst, you see this program, and note any tax implications related to the program.
Would the proposal create a second class of stock and terminate Bushong's election and each distribution must be in an amount sufficient to enable shareholders to pay their state and Federal resulting income taxes on the pass-through.
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