Tommy (age 47) and his wife, Michelle (age 49), live in Columbus, Ohio, where Tommy works for Callahan Auto Parts (CAP) as the vice president of the brakes division. Tommys 2015 salary is $360,000. CAP allows Tommy to participate in its nonqualified deferred compensation plan in which participants can defer 15 percent of their salary for five years. Tommy also participates in CAPs qualified 401(k) plan. Tommys current marginal tax rate is 28 percent and CAPs current marginal tax rate is 34 percent. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) a. Assuming Tommy earns a 6 percent after-tax rate of return and he expects his marginal tax rate to be 30 percent in five years, what before-tax deferred compensation payment in five years would make him indifferent between receiving the deferred compensation payment or 15 percent of his salary now (ignore payroll taxes)? b. Assuming CAP has an 8 percent after-tax rate of return and expects its marginal tax rate to be 35 percent in five years, how much would it be willing to pay in five years to be indifferent between paying the deferred compensation or paying 15 percent of Tommys salary now (ignore payroll taxes)? c. Will Tommy and CAP be able to come to an agreement on deferring Tommys salary? Yes No d. Assume that Tommy and Michelle have an AGI of $99,000 before IRA deductions by either spouse. The AGI includes $10,000 that Michelle earned working part-time (but she does not participate in an employer-sponsored retirement plan). Tommy and Michelle file a joint return. What is the maximum deductible contribution Tommy and Michelle may make to a traditional IRA? e. Tommy has a balance of $55,000 in his traditional IRA. Due to some recent tax cuts, his marginal tax rate is 20 percent, so he would like to roll his traditional IRA into a Roth IRA. What are the tax consequences to Tommy if he takes $55,000 out of the IRA, pays the taxes due from the traditional IRA distribution, and contributes the remaining distribution to the Roth IRA?