Based Only on the Information Provided for Each Scenario, Determine

question 119

Essay

Based only on the information provided for each scenario, determine whether Kristi or Cindy will benefit more from using the timing strategy and why there will be a benefit to that person. Use Exhibit 3.1. (Round discount factor(s)to three decimal places.)
a. Kristi has a 40 percent tax rate and can defer $20,000 of income. Cindy has a 30 percent tax rate and can defer $30,000 of income. b. Kristy has a 30 percent tax rate and a 10 percent after-tax rate of return and can defer $25,000 of income for three years. Cindy has a 40 percent tax rate and an 8 percent after-tax rate of return and can defer $20,000 of income for four years..

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Definitions:

Guilty By Reason Of Insanity

A legal defense by which a defendant claims their mental illness was so severe at the time of the crime that they were unable to discern right from wrong, absolving them of legal responsibility for the said crime.

Professional Autonomy

The independence professionals have to make decisions based on their expertise within their field.

Acquitted On Grounds Of Insanity

A legal verdict whereby an individual is found not guilty of a crime due to mental illness, rendering them incapable of understanding the nature or wrongness of their actions at the time.

Property Crimes

Crimes that involve the theft of property without bodily harm to the victim, such as burglary, larceny, and vehicle theft.