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Larry and Ally Are Married and File a Joint Return

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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:

Pyrotechnics

The science and craft of using self-contained, exothermic chemical reactions to produce heat, light, gas, smoke, and/or sound for entertainment or industrial purposes.

Roman Candles

Fireworks consisting of a long tube containing several charges that shoot out stars or exploding shells when lit.

Gilberto

A personal name of Italian or Portuguese origin, potentially referring to notable individuals in various fields.

Trumpet

A brass wind instrument with a flared bell and a bright, penetrating tone, played by blowing air through closed lips.

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