Ted,a cash basis taxpayer,received a $150,000 bonus in 2014 when he was in the 35% marginal tax bracket.In 2015,when Ted was in the 28% marginal tax bracket,it was discovered that the bonus was incorrectly computed,and Ted was required to refund $40,000 to his employer.As a result of the refund,Ted can reduce his 2015 tax liability by $14,000 (.35 × $40,000).

Question

Quizplus · Accepted Answer

The Answer is True

Ted,a Cash Basis Taxpayer,received a $150,000 Bonus in 2014 When