Melinda invests $390,000 in a City of Heflin bond that pays 6 percent interest. Alternatively, Melinda could have invested the $390,000 in a bond recently issued by Surething Inc. that pays 10 percent interest and has risk and other nontax characteristics similar to the City of Heflin bond. Assume Melinda's marginal tax rate is 40 percent. (Leave no cells blank - be sure to enter "0" wherever required. Round your after-tax rate of return to one decimal place.) Required: a. What is her after-tax rate of return for the City of Heflin bond? b. How much explicit tax does Melinda pay on the City of Heflin bond? c. How much implicit tax does she pay on the City of Heflin bond? d. How much explicit tax would she have paid on the Surething Inc. bond? e. What is her after-tax rate of return on the Surething Inc. bond? a % b. C. d. After-tax rate of return Explicit tax Implicit tax Explicit tax After-tax rate of return e % Schedule X-Single If taxable income is over:But not over: The tax is: S 0 $ 9,875 10% of taxable income $ 9,875 $ 40,125 $987.50 plus 12% of the excess over $9.875 $ 40,125 $ 85,525 54.617.50 plus 22% of the excess over $40,125 $ 85,525 $163,300 $14.605.50 plus 24% of the excess over $85.525 $163,300 $207,350 $33.271.50 plus 32% of the excess over $163,300 $207,350 $518,400 547.367.50 plus 35% of the excess over $207,350 $518,400 $156,235 plus 37% of the excess over $518,400 | I Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: The tax is: S 0 $ 19,750 10% of taxable income $ 19,750 $ 80,250 $1,975 plus 12% of the excess over $19,750 $ 80,250 $171,050 $9,235 plus 22% of the excess over $80,250 $171,050 $326,600 $29,211 plus 24% of the excess over $171,050 $326,600 $414,700 566,543 plus 32% of the excess over $326,600 $414,700 $622,050 594,735 plus 35% of the excess over $414,700 $622,050 $167,307.50 plus 37% of the excess over $622,050 Schedule Z-Head of Household If taxable income is over:But not over: The tax is: S 0 $ 14,100 10% of taxable income $ 14,100 $ 53,700 $1,410 plus 12% of the excess over $14,100 $ 53,700 $ 85,500 56,162 plus 22% of the excess over $53,700 $ 85,500 $163,300 $13,158 plus 24% of the excess over $85,500 $163,300 $207,350 $31.830 plus 32% of the excess over $163,300 $207,350 $518,400 545.926 plus 35% of the excess over $207,350 $518,400 $154,793.50 plus 37% of the excess over $518,400 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: The tax is: S 0 $ 9,875 10% of taxable income $ 9.875 $ 40,125 $987.50 plus 12% of the excess over $9,875 $ 40,125 $ 85,525 $4,617.50 plus 22% of the excess over $40,125 $ 85,525 $163,300 $14.605.50 plus 24% of the excess over $85.525 $163,300 $207,350 $33,271.50 plus 32% of the excess over $163,300 $207,350 $311,025 $47,367.50 plus 35% of the excess over $207,350 $311,025 $83.653.75 plus 37% of the excess over $311,025
