Week 12 class exercises.docx

Week 12 class exercises.docx - Chapter 12 Exercises 1...

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Chapter 12 Exercises 1. FAMILY Partnership: Ms. JBC owns rental property generating 75,000 per year in taxable income. Ms. JBC marginal tax rate is 28%. She plans to create a family partnership consisting of herself and 2 of her children. Her children are both in the 15% marginal tax rate. Ms. JBC will transfer the rental property to the partnership. How much tax will be saved by this family from this arrangement? 2. CONSTRUCTIVE Dividends: Mr. JBC owns 100% of the shares of the J Corporation. For the past several years, the corporation has earned approximately 500,000 in taxable operating income. The Corporation paid all of its income as a bonus to its shareholder, Mr. JBC and reported no taxable income. The IRS recently audited the corporation’s 2012 tax return and determined that ½ of this salary bonus [250,000] was unreasonable compensation for Mr. JBC and characterized it
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  • Fall '15
  • monroe
  • Progressive Tax, Taxation in the United States, Ms. JBC, Mr. JBC

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