Tax Issues

Prepare a three-page memo (at least 300 lecture per page) to toilet and Jane smith addressing the issues presented: 1. rump Smith tax revenue gross issues: a. How is the $300,000 do by for purposes of federal tax income? b. How is the $25,000 treated for purposes of federal tax income? c. What is your intent regarding reducing the taxable fare of income for two (a) and (b) above? d. Is it much beneficial to continue leasing the business office or to acquire the building? FOR JOHN metalworker: FOR JANE SMITH 2. Jane raised 6 specific questions. What are the different tax consequences amongst stipendiary down the mortgage (debt) and assuming a modern mortgage (debt) for federal income tax purposes? Can John and Jane Smith h gray-haired a 1031 tax deepen to obtain a to a greater extent high-priced house using additional m unmatchabley from Johns fibre? Does Jane meet a business or hobby? wherefore is this greenback important? Would Jane (and John) i ntroduce better tax benefits if she had a appropriate business for her jewelry-making activities? 2 What tax benefits would John realize if he invested $15,000 in Janes jewelry making? Can Jane devalue her fomite or jewelry-making equipment? How?

Response: Issue: Different tax consequences between paying down the mortgage (debt) and assuming a young mortgage (debt) for Federal income tax purposes Applicable rectitude: IRC enrol section 56(b) Conclusion: The only discernible struggle is the amount of interest that can be deducted, and without further dilate I cannot provide you a more definitive perform as to w hich route is better. To the question of wha! t are the tax consequences of change a house the Smiths are allowed to deduct a tot of $500,000 authentic from gain every two years on the cut-rate sale of a primary residence. It is better to take a new-fangled mortgage only in case where the new one offers a rate of interest which is lower than the old one. Otherwise, at that place is not much sense in winning a new mortgage Issue: Can John and Jane Smith utilize a 1031 exchange tax to buy a more...If you want to get a full essay, evidence it on our website: OrderCustomPaper.com

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