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Please answer all parts, thanks. Please show work too 18. A cash basis, calendar year taxpayer acquired a $2,000 personal computer and software for cash.
Please answer all parts, thanks. Please show work too
18. 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 computerStep by Step Solution
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