LO.2 Tonya, who lives in Virginia, inherited a $10,000 State of Virginia bond in 2012. Her marginal
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LO.2 Tonya, who lives in Virginia, inherited a $10,000 State of Virginia bond in 2012.
Her marginal Federal tax rate is 35%, and her marginal state tax rate is 5%. The Virginia bond pays 4% interest, which is not subject to Virginia income tax. She can purchase a corporate bond of comparable risk that will yield 6% or a U.S. government bond that pays 5.6% interest. Tonya does not itemize her deductions. Which investment will provide the greatest after-tax yield?
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Related Book For
South Western Federal Taxation 2013 Individual Income Taxes
ISBN: 9781133189558
36th Edition
Authors: William Hoffman, James E. Smith
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