Perry Is in the 33% Tax Bracket

question 62

Multiple Choice

Perry is in the 33% tax bracket.During 2013,he had the following capital asset transactions: Perry's tax consequences from these gains are as follows:

• A)(15% ´ $30,000)+ (33% ´ $4,000).
• B)(15% ´ $10,000)+ (28% ´ $30,000)+ (33% ´ $4,000).
• C)(0% ´ $10,000)+ (28% ´ $30,000)+ (33% ´ $4,000).
• D)(15% ´ $40,000)+ (33% ´ $4,000).
• E)None of the above.

---

Definitions:

Shareholder's Equity

The residual interest in the assets of a corporation after deducting liabilities, often represented by stock capital and retained earnings.

Internally Generated Trademark

A trademark that has been developed through the internal efforts of a company, not acquired or purchased from a third party.

Contingent Liability

(a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or (b) a present obligation that arises from past events but is not recognised because: (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) the amount of the obligation cannot be measured with sufficient reliability.

Business Combination Valuation

The process of estimating the value of different companies coming together through acquisitions or mergers.