termpaper example youdecide3

termpaper example youdecide3 - All the information is not...

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All the information is not provided in the question. I am assuming the $300,000 is the lawyers income from his business and the $25,000 is his wife`s jewelry business. 1. John Smith tax issues: a. How is the $300,000 treated for purposes of Federal tax income? It is ordinary income. b. How is the $25,000 treated for purposes of Federal tax income? It would be ordinary income. c. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above? They could set up retirement plans or buy business equipment to increase expenses. 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? You get a deduction for paying the interest. Assuming a mortgage has no federal tax consequences. b. Can John and Jane Smith utilize a 1031 tax exchange to buy a more expensive house using additional money from John’s case? No. A 1031 only would be viable for business property. Not their personal residence.
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termpaper example youdecide3 - All the information is not...

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