Mingming and Xavier, Unrelated Single Taxpayers, Have Each Incurred a $1,000

question 780

Multiple Choice

Mingming and Xavier, unrelated single taxpayers, have each incurred a $1,000 expenditure. Before considering this expenditure, Mingming has taxable income of $500,000 and Xavier has taxable income of $32,000. Assume the expenditure qualifies as either a tax deduction or a 25% credit. Which of the following statements is correct?

• A) Mingming will prefer the credit, but Xavier will prefer the deduction.
• B) Both taxpayers will prefer the deduction.
• C) Mingming will prefer the deduction, but Xavier will prefer the credit.
• D) Both taxpayers will prefer the credit.

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Definitions:

Neuroscience

The scientific study of the nervous system, aiming to understand the biological basis of consciousness, perception, memory, and other mental capabilities.

Negative Correlation

A connection between two factors where as one factor rises, the other falls.

Variable

Any condition or factor that can be manipulated, controlled, or measured.

Research Method

Various techniques and strategies used by scientists to gather and analyze data in order to investigate specific questions or hypotheses.