Larry and Ally Are Married and File a Joint Return

question 94

Short Answer

Larry and Ally are married and file a joint return.They are considering purchasing a personal residence that will generate two deductions: $10,000 in home mortgage interest and $8,000 in real estate taxes.Their marginal tax rate is 25%.What is the total tax savings if Larry and Ally purchase the residence?

---

Definitions:

Difference Threshold

The minimum difference in stimulation that a person can detect 50% of the time, also known as just noticeable difference (JND).

Stereo

A method of sound reproduction that creates an illusion of multi-directional audible perspective, typically using two or more independent audio channels.

Differentiate

The process of distinguishing or discriminating between two or more things, or the process of becoming distinct or specialized in structure or function.

Sensory Adaptation

How sensory receptors gradually become less responsive to steady stimuli over time.