In December 2017,Arnold Is Considering One Last Financial Decision for 2017.He

question 140

Essay

In December 2017,Arnold is considering one last financial decision for 2017.He has $5,000 that he would like to spend before the end of the year.His options include donating the money to a qualified charity (and receiving an itemized deduction)or using the money as a down payment on the purchase of $30,000 of equipment for his business.If he purchases the equipment,he will receive an 8% tax credit for the entire purchase price.He does not need the equipment until early next year,so the purchase at this time is not critical.Assume that Arnold is in the 33% marginal tax rate bracket in 2017 and itemizes his deductions.Which option will provide him with the greatest tax benefit? Explain and show any calculations that support your answer.

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Definitions:

Visioning

A strategic planning process that involves creating a vivid and compelling picture of the future that an organization seeks to achieve.

Organizational Charter

A formal document that defines the organization's purposes, governance structure, and operational guidelines.

Mandates

Directives issued by a legal or governmental body, requiring parties to follow specified instructions.

Values

Fundamental beliefs or principles that guide an individual's or organization's actions and decisions.