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

Exercise 15

Rich and Shauna Nielson file a joint tax return, and they itemize deductions.Assume their marginal tax rate on ordinary income is 25 percent.The Nielsons incur $2,000 in miscellaneous itemized deductions, excluding investment expenses.They also incur $1,000 in noninterest investment expenses during the year.What tax savings do they receive from the investment expenses under the following assumptions:
a.Their AGI is $90,000.
b.Their AGI is $130,000.