Mingming and Xavier,unrelated Single Taxpayers,have Each Incurred a $1,000 Expenditure

question 47

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

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Definitions:

Rubber Insulators

Materials used to prevent the passage of electricity, heat, or sound, typically made from rubber compounds.

Hoseclamp Worm

A type of hose clamp with a threaded worm gear mechanism used to tighten and secure a hose over a fitting.

Dynamic Balance

The state achieved when a rotating object distributes its mass evenly around its rotation axis, minimizing vibration and improving performance.

Counterweights

Weights used to balance rotating parts in machinery, ensuring smooth operation and reducing vibration.