Problem 12-05 (Algo) [LO 12-3] Ms. Singh, who is in the 37 percent tax bracket, owns a residential apartment building that generates $104,000 annual taxable income. She plans to create a family partnership by giving each of her two children a 20 percent equity interest in the building. (She will retain a 60 percent interest.) Ms. Singh will manage the building, and value of her services is $24,000 per year. Required: If Ms. Singh's children are in the 12 percent tax bracket, compute the tax savings from this income-shifting arrangement. (ignore any payroll tax consequences.) Tax savings from this income-shifting arrangement

Problem 12-05 (Algo) [LO 12-3] Ms. Singh, who is in the 37 percent tax bracket, owns a residential apartment building that generates $104,000 annual taxable income. She plans to create a family partnership by giving each of her two children a 20 percent equity interest in the building. (She will retain a 60 percent interest.) Ms. Singh will manage the building, and value of her services is $24,000 per year. Required: If Ms. Singh's children are in the 12 percent tax bracket, compute the tax savings from this income-shifting arrangement. (ignore any payroll tax consequences.) Tax savings from this income-shifting arrangement

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 60P

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Check my work. 25 Bill and Mary filed a joint Federal income tax return this year. Mary owns a 30% interest in MAJIC Partnership, a women’s dress boutique. Mary’s share of the partnership’s net income is $280,000. Her shares of the partnership’s W–2 wages and unadjusted basis of depreciable property are $100,000 and $300,000, respectively. What is Bill and Mary’s maximum QBI deduction if their total taxable income is $300,000? Since their total taxable income is less than the threshold limit of $326,600, the deduction is calculated as 20%. $280,000 * 20% (QBI deduction) = $56,000 What is the maximum QBI deduction if Bill and Mary’s total taxable income is $450,000? Since $450,000 exceeds the threshold limit of $326,600, and above $100,000 over in the case of filing joint returns, the limitation phase is applicable.
Problem 12-05 (Algo) [LO 12-3] Ms. Singh, who is in the 37 percent tax bracket, owns a residential apartment building that generates $104,000 annual taxable income. She plans to create a family partnership by giving each of her two children a 20 percent equity interest in the building. (She will retain a 60 percent interest.) Ms. Singh will manage the building, and value of her services is $24,000 per year. Required: If Ms. Singh's children are in the 12 percent tax bracket, compute the tax savings from this income-shifting arrangement. (ignore any payroll tax consequences.) Tax savings from this income-shifting arrangement
Problem 9-19 (LO. 2, 3, 4, 5) Taylor, age 18, is a dependent of her parents. For 2023, she has the following income: $6,250 of wages from a summer job, $800 of interest from a money market account, and $300 of interest from City of Chicago bonds. If an amount is zero, enter "0". Click here to access the 2023 tax rate schedule. a. Determine the following: Taylor's standard deduction for 2023 is $ Taylor's taxable income for 2023 is s b. Compute Taylor's "net unearned income for the purpose of the kiddie tax. Compute Taylor's income tax. [Her parents file a joint return and have taxable income of $135,000 (no dividends or capital gains).]
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Discussion Question 12-5 (Algorithmic) (LO. 4, 7) Ava and her husband, Leo, file a joint return and are in the 24% Federal income tax bracket in 2020. Ava's salary is $102,050. Her employer offers a child and dependent care reimbursement plan that allows up to $4,750 of qualifying expenses to be reimbursed in exchange for a $4,750 reduction in the employee's salary. Because Ava and Leo have two minor children requiring child care that costs $5,225 each year, Ava is wondering if she should sign up for the program instead of taking advantage of the credit for child and dependent care expenses. Analyze the effect of the two alternatives. Assume a FICA tax rate of 7.65%. Do not round intermediate computations. If required, round your final answers to the nearest dollar. Click to view Percentage Credit based on Adjusted Gross Income. a. If Ava and Leo take advantage of the plan, they would is excluded from а. save income taxes because the reimbursement of child are expenses v gross income.…
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