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1. You own a home and are thinking of doing some home repairs. This year there is a tax credit of 30% the cost of materials for adding insulation and for replacing windows and external doors, up to a $3,000 tax-credit maximum.

a. You decide to add insulation to your attic, which costs $1,000 in materials, and you install it yourself. What is the dollar amount of the tax credit?

b. You are in a 28% tax bracket. How much does the home-repair tax credit reduce your tax liability?

c. How much would you have to spend on qualified improvement materials to maximize your $3,000 tax credit?

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