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

question 111

Essay

Farouk transfers bonds with a face value of $10,000 into his dependent son's name on January 1, 2018 as his son will turn 24 this year. The bonds pay 8 percent interest annually and Farouk bought the bonds in 2009 for $9,500 (the discount was not required to be amortized). His son sells the bonds for $10,500 at the end of 2018 after receiving the 2018 interest. If Farouk is in the 37 percent marginal tax bracket, how much did he save in 2018 in taxes by transferring the bonds into his son's name. His son had no other income in 2018.

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Definitions:

Autonomy

The degree to which a job provides an employee with independence and discretion to schedule their work and determine how it is done.

Reducing Boredom

Strategies or actions taken to minimize monotony and disinterest in both personal and professional activities, aiming to increase engagement and satisfaction.

Repetitive Strain Injuries

Physical ailments caused by repeated motion or overuse, affecting muscles, nerves, and tendons, common in workplace environments.

Self-leadership

A process where individuals influence themselves to achieve the self-direction and self-motivation necessary to perform.