Fred, a cash basis taxpayer, received a $15,000 bonus from his employer in 2019. The bonus was based on the company’s profits for 2018. In 2020, the company discovered that its 2018 profits were computed incorrectly. As a result, Fred received an additional $10,000 with respect to 2018 profits. Fred’s marginal tax rate in 2019 was 12%, and it was 35% in 2020. Sue, also a cash basis taxpayer, received a $35,000 bonus in 2019 that was based on 2018 profits. In 2020, the company discovered that it had overstated its profits in 2019. As a result, Sue was required to repay $10,000 of her bonus in 2020. Sue was in the 35% marginal tax bracket in 2019 and in the 12% marginal bracket in 2020. What special tax treatment is available to Fred and Sue as a result of their employer’s errors?
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Business, 21.06.2019 18:30, preciadogabriel40
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Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: asset a e(ra) = 18.5% σa = 20% asset b e(rb) = 15% σb = 27% an investor with a risk aversion of a = 3 would find that on a risk-return basis. a. only asset a is acceptable b. only asset b is acceptable c. neither asset a nor asset b is acceptable d. both asset a and asset b are acceptable
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Fred, a cash basis taxpayer, received a $15,000 bonus from his employer in 2019. The bonus was based...
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