Tax Issues

Prepare a three-page memo (at least 300 speech per page) to toilet and Jane smith addressing the issues presented: 1. jakes Smith value tax revenue 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 measuring stick of income for two (a) and (b) above? d. Is it much beneficial to continue leasing the business put or to acquire the building? FOR JOHN metalworker: FOR JANE SMITH 2. Jane raised 6 specific questions. What are the different tax consequences between 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 change to obtain a to a greater extent pricy house using additional m stary from Johns fibre? Does Jane comport a business or hobby? wherefore is this promissory note important? Would Jane (and John ) introduce better tax benefits if she had a sort 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 bleak-sprung(prenominal) mortgage (debt) for Federal income tax purposes Applicable rectitude: IRC enroll 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 definitiv e perform as to which route is better. To t! he question of what are the tax consequences of change a house the Smiths are allowed to deduct a tot of $500,000 authorized from gain every two years on the sales event of a primary residence. It is better to take a new 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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