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    Identify Tax Issues

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    Identify the tax issue or issues suggested by the following situations and state issue in the form of a question.(need three questions)

    Ellie has operated a sole proprietorship for six years during which net profit has been stable and Ellie's marginal tax rate has been a constant 25 percent. Ellie's projects that her profit next year will be the same as this year. Consequently, she estimates her tax cost for next year based on a 25 percent rate. Late in the year, Ellie's husband graduated from law school and accepted an excellent offer of employment from a local firm.

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    Solution Preview

    1. Will tax rates change this year from the past years? The fact that tax rates were stable in the past does not mean they will be stable in the future.
    2. Will ...

    Solution Summary

    Identify the tax issue or issues suggested by the following situation and state the issue(s) in the form of a question.

    Ellie has operated a sole proprietorship for six years during which net profit has been stable and Ellie's marginal tax rate has been a constant 25 percent. Ellie's projects that her profit next year will be the same as this year. Consequently, she estimates her tax cost for next year based on a 25 percent rate. Late in the year, Ellie's husband graduated from law school and accepted an excellent offer of employment from a local firm.

    $2.19

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