Ward and June Are in the 28% Tax Bracket

question 38

Multiple Choice

Ward and June are in the 28% tax bracket. Included in their assets is a Dell Computer Corporation bond with a face value of $10,000. The bond pays $1,000 a year in interest. Ward and June gift the bond to their son, Wally age 19) , on January 1, 2014. Wally is in the 15% tax bracket. The 2014 net tax savings for the family unit of Ward, June and Wally related to the transfer of the bond is

• A) $ -0-
• B) $130
• C) $150
• D) $280