g Jana just found out that she is going to receive an end-of-year bonus of $32,200. She is in the 35 percent marginal tax brac

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g Jana just found out that she is going to receive an end-of-year bonus of $32,200. She is in the 35 percent marginal tax brac

ket. Calculate her income tax on this bonus. Now assume that instead of receiving a bonus, Jana receives the $32,200 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? Her income tax on this bonus is $nothing. (Round to the nearest dollar.) Now assume that instead of receiving a bonus, Jana receives the $32,200 as a long-term capital gain. What will be her tax? Which form of compensation offers Jana the best after-tax return? Would your calculation be different if the gain was short-term rather than long-term? (Select the best answer below.) A. Jana will pay $4,830 ($32,200× 15%) in long-term capital gains taxes. Due to the reduced tax rate, the long-term capital gain offers Jana the best after-tax return. Because short-term capital gains are taxed as ordinary income, she will not receive any tax benefit if she receives the bonus as a short-term capital gain.

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1 answer:

maria [59] · Answer 1 · 2022-02-11T08:04:56+03:00

Answer:

Jana just found out that she is going to receive an end-of-year bonus of $32,200. She is in the 35 percent marginal tax bracket. Calculate her income tax on this bonus.

tax liability = $32,200 x 35% = $11,270

Now assume that instead of receiving a bonus, Jana receives the $32,200 as a long-term capital gain. What will be her tax?

tax liability = $32,200 x 15% = $4,830

Which form of compensation offers Jana the best after-tax return?

if the bonus is taxed as a long term capital gain, she will páy less than half the taxes, so it is the best option for her

Would your calculation be different if the gain was short-term rather than long-term?

Short term capital gains are taxed at the same rate as ordinary income, so the difference between the bonus being a long vs short term capital gain is very significant to Jana.

g Jana just found out that she is going to receive an​ end-of-year bonus of ​$32,200. She is in the 35 percent marginal tax brac

g Jana just found out that she is going to receive an end-of-year bonus of $32,200. She is in the 35 percent marginal tax brac