What is the annual benefit of parents gifting bonds

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Question 4 options:
What is the annual benefit of parents gifting bonds with annual investment income of $300 to their 10-year-old child if the parents are in the 35 percent and the child is in the 15 percent bracket?
(Round your answers to the nearest whole number. Omit the "$" sign in your response.)
Tax due if in parent’s name (a) =

Tax due if in child’s name (b) =

Annual Tax benefit [(a) - (b)] =

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Question 5


Question 5 options:
Laurence bought a classic car for $40,000 as a business investment opportunity. He was allowed to depreciate it over 10 years and take the amount as a business tax deduction on his return. At the end of 10 years, the car was sold for $40,000. If Laurence was in the 38 percent marginal tax bracket and could earn 8 percent after tax on the cash flow generated, what was his cumulative cash benefit after sale on this transaction?
(Round your answers to the nearest whole number. Omit the comma and "$" sign in your response.)
(a) Yearly Deductible Depreciation =

(b) Yearly Tax Benefit =

(c) Cumulative Tax Benefit (future value) =

(d) Tax on $40,000 Capital Gain =

(e) Net Cash earned [(c) - (d)] =

 

Reference no: EM13332174

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