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.

a). Income tax liable this year=$700

b). Income tax liable next year=$375

Explanation:

a). Income tax liability now

If he makes a profit of $2,500 now,

He will be liable to an income tax=marginal tax bracket×taxable income

where;

marginal tax bracket=28%

taxable income=$2,500

Replacing;

Income tax liability=(28/100)×2500=$700

Income tax liable this year=$700

b). Income tax liability next year

If he makes a profit of $2,500 next year,

He will be liable to an income tax=marginal tax bracket×taxable income

where;

marginal tax bracket=15%

taxable income=$2,500

Replacing;

Income tax liability=(15/100)×2500=$375

Income tax liable next year=$375

answer; commerce clearing house;

answer; buying the bill at a discount from the face value to be received at maturity;