Andrea, who is in the 35% 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 additional taxes or phase-outs for high-income taxpayers.)
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.