Farouk Transfers Bonds with a Face Value of $10,000 into His

question 45

Essay

Farouk transfers bonds with a face value of $10,000 into his dependent son's name on January 1,2015 as his son will turn 24 this year.The bonds pay 8 percent interest annually and Farouk bought the bonds in 2006 for $9,500.His son sells the bonds for $10,500 at the end of 2015 after receiving the 2015 interest.If Farouk is in the 39.6 percent marginal tax bracket,how much did he save in 2015 in taxes by transferring the bonds into his son's name.His son had no other income in 2015.

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Social Cognition

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