How much would elizabeth have to receive in taxable

Assignment Help Macroeconomics
Reference no: EM13314670

Kevin and Elizabeth are negotiating a divorce settlement. Kevin is in the 35 percent marginal tax bracket and Elizabeth is in the 15 percent marginal tax bracket. Kevin has offered to pay Elizabeth $15,000 each year for 10 years; payments would cease if Elizabeth dies earlier. Elizabeth is willing to settle for that amount only if the payments are tax free because she needs at least $15,000 after tax to meet her expenses.

a. How much would Elizabeth have to receive in taxable alimony payments from Kevin to have the equivalent of a $15,000 tax-free payment?

b. If Kevin agrees to an $18,500 alimony payment, what is the after-tax cash flow for Kevin and Elizabeth? By how much does their cash flow improve over the proposed $15,000 payment?

Reference no: EM13314670

Questions Cloud

Copiers cost about twice as much as workers : A copy company wants to expand production. It currently has 20 workers who share eight copiers. Two months ago, the firm added two copiers, and output increased by 100,000 pages
Local casinos allow people to gamble without having to trave : A question facing many U.S. states is whether to allow casino gambling. States with casino gambling have seen a substantial increase in tax revenue flowing to state government. This revenue can be
Determine the steps that the federal reserve : Explain how each of the following variables will be affected by proposed steps that you have identified in the first part of the discussion: money supply, interest rates, inflation rate, aggregate demand, and output. Provide support for your response
What happens to the budget line when the price : Suppose a consumer's income is used on two goods, X and Y. The consumer's income is $200 and the prices of X AND y are $10 and $5 respectively.
How much would elizabeth have to receive in taxable : If Kevin agrees to an $18,500 alimony payment, what is the after-tax cash flow for Kevin and Elizabeth? By how much does their cash flow improve over the proposed $15,000 payment?
Discuss the tax implication of each alternative and recommen : Palace Company (an accrual-basis taxpayer) is writing the lease agreements for its new apartment complex, Palace Apartments, which will rent for a minimum of $2,000 per month
What do you recommend that she do would your answer change : Sandra, a single taxpayer in the 35 percent marginal tax bracket, has $60,000 she can invest in either corporate bonds with a stated interest rate of 9 percent or general revenue bonds issued by her municipality
Which method should he choose and why : Robert plans to start a new business that he expects will experience steady growth in profits for the next 15 years. He needs to select a method of accounting to use: cash or accrual.
Adjusted gross income by entering the following information : Compute Pierre Lappin’s adjusted gross income by entering the following information on Form 1040: $50,000 salary, $5,000 qualified dividend income, $3,000 interest income from corporate bonds

Reviews

Write a Review

Macroeconomics Questions & Answers

  What three proposals have been made to remedy the problem

Many of the new residents have expressed concern at the amount of pollution (primarily particulate matter in the air and waste water in the town's river) emitted by Branding iron. Three proposals have been made to remedy the problem.

  Describe how monetary and fiscal policy affect output

What is the mechanism by which the central bank announcing an inflation target translates into an actual inflation rate and how would your answer to q1 change if households had rational expectations

  Difference between nominal interest and real interest rate

Would you rather earn a 4 % nomical or 4% real interest rate? Illustrate by describing the difference between nominal and real variables.

  How do you predict the economy will perform in the next two

How do you predict the economy will perform in the next two years given the current state of two of the economic factors you identified? How might your organization be affected by these changes?

  The company provides the broker with an infrastructure

the company provides the broker with an infrastructure, such as clerical support, phone services, and office space, and especially for new brokers, a base wage.

  How many firms will there be in long run equilibrium

Suppose there are n identical firms in a market. each firm's cost function is given by C= 240+14q^2, where q is the amount that an individual firm produces. this means that an individual firm's marginal cost is given by MC = 30q. Also, the market ..

  Questions on aggregate supply and long-run equilibrium

What are the advantages of Fed increasing interest rates if the GDP gap is positive?

  What are the implications in our economy of more output

Between October 2004 and 2005, real GDP in the United States increased by 3.6 percent, while nonfarm payroll jobs increased by only 1.4 percent. How is it possible for output to increase without a proportional increase

  What happens to the quanity of net exports

Suppose the French suddenly develop a strong taste for California wines. Answer the Following with words and a Diagram: a. What happens to the demand for dollars in the market for foreign-currency exchange

  Important question about perfectly competitive firm

Could a labor union or a minimum wage law efficiently help to increase wages, rise employment, or improve working situations in a company

  Find the equilibrium wage and employment before any tax

Suppose the supply for optometrists is given by LS= -6 + 0.6W, while the demand curve is given by LD= 50-W. Also, assume that the government imposes a payroll tax equal to $8 for each optometrist hired by a firm. a. Find the equilibrium wage and e..

  Computing onset of diminishing marginal product

The number of repairs manufactured by a computer repair shop depends on the number of employees as follows:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd