Marginal ordinary income tax rate

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On January 1 of year 1, Nick and Rachel Sutton purchased undeveloped land as an investment. The purchase price of th $150,000. They paid for the property by making a down p $50,000 and borrowing $100,000 from the bank at an interes percent per year. At the end of the first year, the Suttons paid interest to the bank. During year 1, the Suttons only source of it salary. On December 31 of year 2, the Suttons paid $6,000 of int bank and sold the land for $210,000. They used $100,000 proceeds to pay off the $100,000 loan. The Suttons itemize ded are subject to a marginal ordinary income tax rate of 35 percent.

Reference no: EM133246865

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