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:

Accountant Liability

The legal responsibility accountants have to their clients and third parties, regarding the accuracy of financial statements and audit reports.

Restatement (Third) Of Torts

A set of model legal doctrines in the United States that seeks to clarify, modernize, and otherwise improve the law of torts, acting as guidelines or persuasive authority in court decisions.

Auditor Liability

Legal responsibility borne by auditors due to negligence or other failures in their auditing activities.

Restatement Rule

A principle in common law jurisdictions where courts follow authoritative summaries of the common law, often used for clarity and consistency in legal principles.