You recently received the following e-mail from a client and friend: Hey Great Student, I cannot believe

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You recently received the following e-mail from a client and friend: Hey Great Student, I cannot believe it is almost year end! Only a few days before it’s 2019. As you recall, I was lucky enough to win big at the casino back on New Year’s Day earlier this year (thanks for celebrating with me). I took the $3,000 I won and bought 100 shares of stock in that cool new smartphone app company, Trivia Addiction. I just love playing that game. Anyway, the stock has done well, and I am thinking of selling before year end now that the price has reached $240 per share. Since you are my tax adviser, I thought I’d ask a couple of questions: 

1. Is there any reason to wait and sell later? 

2. If I don’t sell, the price might go down (TriviaMaster seems to be replacing TriviaAddiction as the “hot” new game). 

I’m thinking the price might be as low as $220 by early next year. My taxable income this year and next year is expected to be $38,500 (not including the stock sale). I think that puts me in the 12% tax bracket? Any suggestions on what I should do? Thanks! Sue Prepare an e-mail to your friend Sue addressing her questions. Be certain to include estimates of the different after-tax outcomes she is suggesting. Sue is a single taxpayer and not a tax expert and so your language should reflect her limited understanding of tax law and avoid technical jargon. Although Sue is your friend, she is also a client and your e-mail should maintain a professional style.


Passive Activity Loss Limitations See separate instructions. OMB No. 1545-1008 Fom 8582 2018 Attach to Form 1040 or Form


Part II Special Allowance for Rental Real Estate Activities With Active Participation Note: Enter all numbers in Part Il

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Income Tax Fundamentals 2019

ISBN: 9781337703062

37th Edition

Authors: Gerald E. Whittenburg, Steven Gill

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