Jeff is trying to decide whether to sell his baseball card collection.He has been offered a price that would give him a profit of $2,500 by a dealer who has agreed to pay Jeff this price now or in January of next year.This year Jeff is in the 28 percent marginal tax bracket,but next year Jeff expects to be in the 15 percent marginal tax bracket.Therefore,the estimated income tax liability on this $2,500 income would be ____ this year and ____ next year.

Question

Quizplus · Accepted Answer

The tax liability for this year is calculated as $2,500 * 28% = $700, and for next year it is $2,500 * 15% = $375.

Jeff Is Trying to Decide Whether to Sell His Baseball