McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 28

Assume Sarah is a cash-method, calendar-year taxpayer, and she is considering making the following cash payments related to her business.Calculate the after-tax cost of each payment assuming she has a 25 percent marginal tax rate.a.$2,000 payment for next year's property taxes on her place of business.b.$800 to reimburse the cost of meals incurred by employees while traveling for the business.c.$1,200 for football tickets to entertain out-of-town clients during contract negotiations.d.$500 contribution to the mayor's re-election campaign.