Theresa and Oliver, Married Filing Jointly, and Both Over 65

question 45

Essay

Theresa and Oliver, married filing jointly, and both over 65 years of age, have no dependents.Their 2017 income tax facts are: $\begin{array}{lr}\text { Theresa's wages } & \$ 165,000 \\\text { Oliver's wages } & 33,000 \\\text { Shortterm capital gain } & 36,000 \\\text { Longterm capital loss } & (41,000)\end{array}$ What is their taxable income for 2017?

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Definitions:

Capital Structure

The composition of a company's liabilities and shareholders' equity including debt, equity, and any other types of financing.

Tax Bracket

A range of income over which the tax rate is constant.

Modigliani-Miller Model

A theory on capital structure that suggests that under certain market conditions (no taxes, no transaction costs), the value of a firm is unaffected by how it is financed.

Restructuring

Restructuring involves modifying the structure or operations of a company, often including changes in financial policies, organizational setup, or business strategy, aimed at increasing profitability or addressing financial challenges.