Larry Is Single and His Standard Deduction for the Year

question 143

Essay

Larry is single and his standard deduction for the year is $6,200.He has itemized deductions of $13,000.If he is in the 25% marginal tax bracket,how much tax would he save by using his itemized deductions?

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Definitions:

Recoverable Amount

The higher value between an asset's fair value minus costs of disposal and its value in use.

Carrying Amount

The amount at which an asset or liability is recognized on the balance sheet after deducting any accumulated depreciation, amortization, or impairment.

Fair Value

An estimate of the price at which an asset or liability would be traded between knowledgeable, willing parties in an arm's length transaction.

Costs To Sell

The direct costs attributable to the disposition of an asset, excluding finance costs and income taxes.