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Larry and Ally Are Married and File a Joint Return

Question 30

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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%.If Larry and Ally purchase the residence,what will be the after-tax cost of the additional $18,000 in expenditures?

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Tax savings of expenditures: (...

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