, 05.02.2021 22:50 soyymiilk

# Firm M and Firm N are related parties. For the past several years, Firm M’s marginal tax rate has been 34 percent and Firm N’s marginal tax rate has been 25 percent. Firm M is evaluating a transaction that will generate \$10,000 income in each of the next three years. Firm M could restructure the transaction so that the income would shift to Firm N. Because of the restructuring, the annual income would decrease to \$9,000. Based on these facts, should Firm M restructure the transaction? Calculate the after-tax profit for both Firm M and Firm N for one year only. It is not necessary to do a present value calculation.

Bernard made a gift of \$500,000 to his brother in 2014. due to bernard’s prior taxable gifts he paid \$200,000 of gift tax. when bernard died in 2019, the applicable gift tax credit had increased. at bernard’s death, what amount related to the \$500,000 gift to his brother is included in his gross estate?
Anew firm is developing its business plan. it will require \$615,000 of assets, and it projects \$450,000 of sales and \$355,000 of operating costs for the first year. management is reasonably sure of these numbers because of contracts with its customers and suppliers. it can borrow at a rate of 7.5%, but the bank requires it to have a tie of at least 4.0, and if the tie falls below this level the bank will call in the loan and the firm will go bankrupt. what is the maximum debt ratio the firm can use? (hint: find the maximum dollars of interest, then the debt that produces that interest, and then the related debt ratio.)a. 41.94%b. 44.15%c. 46.47%d. 48.92%e. 51.49%