A cash basis, calendar year taxpayer acquired a $2,000 personal computer and software for cash. This taxpayer has a marginal tax rate of 33%. This $2,000 cost is not deductible for tax purposes. Required: Answer the following questions:

(a) What is the tax savings from buying the computer?

(b) What is the after-tax cost of the computer?

(c) Was the computer paid with pre-tax or after-tax dollars?

(d) How much pre-tax salary must this taxpayer earn to purchase the computer?