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Unformatted text preview: ($30,000 x (35% 15%) of tax per year. However, the assignment of income doctrine will tax the rental income to Mr. Lucas because he retains ownership of the underlying property. The cash flow directed to Meredith will be treated as a gift. Thus, this scheme may have additional negative tax consequences. Finally, while the IRS has broad powers to recharacterize a transaction, the taxpayer is generally bound by their chosen legal form....
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- Fall '08