How much tax she would save

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Question - Andrea, who is in the 37% tax bracket, is interested in reducing her taxes. She is considering several alternatives. For each alternative, listed below, indicate how much tax, if any, she would save? (For this problem ignore the additional 3.8% tax)

a. Give $2,000 to a charity. Assume she itemizes.

b. Give $2,000 to a charity. Assume she does not itemize.

c. Make a gift of bonds valued at $8,000 yielding $600 of interest annually to her 15 year old daughter who has no other income.

d. Sell the bonds from part c for $8,000 and buy tax exempt bonds yielding $300. In addition to the questions in the text, describe some other potential ideas for Andrea.

Reference no: EM132493967

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