Saysha Is an Officer of a Local Bank That Merges

question 76

Multiple Choice

Saysha is an officer of a local bank that merges with a national bank, resulting in a change of ownership.She loses her job as a result of the merger, but she receives a cash settlement of $390,000 from her employer under her golden parachute.Her average annual compensation for the past five tax years is $110,000.Calculate any nondeductible excise tax Saysha must pay, if any.

• A)$0.
• B)$56,000.
• C)$110,000.
• D)$280,000.
• E)Some other amount.

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Definitions:

Compounded Monthly

Interest that is calculated on the principal and the previously earned interest on a monthly basis, leading to the accumulation of increasingly larger amounts.

Month-end Withdrawals

Financial transactions to remove money from an account or investment at the end of the month, often for budgeting or payment purposes.

Investment Account

A financial account that is used for holding and transacting securities or other investment instruments.

Compounded Quarterly

An interest calculation method where interest is added to the principal sum four times a year.