Fed Taxes & management decisions
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taxes.docxSee the You Decide content item for details, instructions, and grading rubrics. For each issue, you should
1 state the issue;
2 explain and discuss the applicable law (IRC sections, regulations, court decision, and so forth.);
3 present your answer in the form of a concluding paragraph that refers to specific language from the IRC sections, regulations, court decisions, and other sources (if applicable) to support the conclusion;
4 submit it using the template provided in Doc Sharing; and
5 pay attention to the required word count range.
Memo
To: John & Jane Smith
From:
Date: 1/29/15
Re: Summary of various tax issues
(1) John Smith's Tax Issues:
(a) How is the $300,000 treated for purposes of federal tax income?
Applicable Law & Analysis:
Conclusion:
(b) How is the $25,000 treated for purposes of federal tax income?
Applicable Law & Analysis:
Conclusion:
(c) What is your determination regarding reducing the taxable amount of income for both (a) and (b) above?
Applicable Law & Analysis:
Conclusion:
(d) Do I get better tax benefits for paying the lease on office space or for buying the building? What are the differences?
Applicable Law & Analysis:
Conclusion:
(2) Jane Smith Tax Issues:
(a) What are the different tax consequences between paying down the mortgage debt and assuming a new mortgage debt for federal income tax purposes?
Applicable Law & Analysis:
Conclusion:
(b) Can John and Jane Smith utilize a 1031 tax exchange to buy a more expensive house using additional money from John's case?
Applicable Law & Analysis:
Conclusion:
(c) Does Jane have a business or hobby? Why is this distinction important?
Applicable Law & Analysis:
Conclusion:
(d) Would Jane (and John) realize better tax benefits if she had a separate business for her jewelry making activities?
Applicable Law & Analysis:
Conclusion:
(e) What tax benefits would John realize if he invested $15,000 in Jane's jewelry making?
Applicable Law & Analysis:
Conclusion:
(f) Can Jane depreciate her vehicle or jewelry making equipment? How?
Applicable Law & Analysis:
Conclusion:
(3) John and Jane Smith’s Tax Issues:
(a) Should John and Jane file separate or joint tax returns?
Applicable Law & Analysis:
Conclusion:
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