8. Dana intends to invest $30,000 in either a Treasury bond or a corporate bond. The Treasury bond yields 5 percent before tax and the corporate bond yields 6 percent before tax. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

a-1. Assuming Danas federal marginal rate is 25 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume that Dana itemizes deductions.

Corporate bond

Treasury bond

a-2. How much interest after-tax would Dana earn by investing in the corporate bond?

b-1. If she were to move to another state where her marginal state rate would be 10 percent, which of the two options should she choose? Assume that Dana itemizes deductions.

Corporate bond

Treasury bond

b-2. How much interest after-tax would Dana earn by investing in the corporate bond?

9. Dahlia is in the 28 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years:

Date Purchased	Shares	Basis
7/10/2007	400	$	12,000
4/20/2008	300		10,750
1/29/2009	500		12,230
11/02/2011	250		7,300

If Dahlia sells 800 shares of Microsoft for $40,000 on December 20, 2017, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.)

a. She uses the FIFO method.

Capital gain or capital loss?: ?

10. Seth invested $20,000 in Series EE savings bonds on April 1. By December 31, the published redemption value of the bonds had increased to $20,700. How much interest income will Seth report from the savings bonds in the current year absent any special election?

Interest income reported?