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Aldana Klaus has just hired you to help with her tax needs. She was previously doing her taxes on her own and admits that she

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Aldana Klaus has just hired you to help with her tax needs. She was previously doing her taxes on her own and admits that she might not have been doing herself any favors. Aldana owns a German bakery that is treated as a sole proprietor for tax purposes and wants your help determining the tax liability impact from her activities below. Now that she has you on board, she is looking to minimize her tax liability each year, where possible. Aldana is married and has no dependents. 2022 Activity - $20,000 of proceeds from insurance were received after a break in resulted in the loss of her fancy espresso machine (machinery) on October 31,2022 . The property was placed into service on October 10,2021 and cot $47,150. (Two assets were placed into service in 2021 the machinery listed here and the furniture in the bullet point below. In 2021 Aldana did not utilize $179 or bonus depreciation). - Not sure when the dining area of her caf would reopen, Aldana sold the tables \& chairs in her caf to help keep her business afloat on February 3,2022 for $5,000. The furniture was placed into service on January 29, 2021 and cost Aldana $22,000. - Aldana sold equipment used at the caf on November 1, 2022. Aldana purchased and placed the equipment into service on April 1, 2020 (it was the only asset she placed into service in 2020). Aldana paid $55,000 in cash plus took out a mortgage of $55,000 to purchase the machine. In 2020 Aldana did not utilize $179 or bonus depreciation. The seller gave her $5,000 cash plus they will pay her $55,000 on November 1,2023 and $40,000 on November 1,2024 plus $1,200 and $1,000 of interest, respectively. - On November 1, 2022 Aldana sold Johnson \& Johnson stock for $35,000. She had purchased 4 years earlier for $49,000. - Also on November 1, 2022, Aldana sold stock she inherited from her grandmother on March 1, 2022 for $20,000. Her grandmother purchased the stock for $27,000 in January of 2022 and it was worth $24,000 on the date she died. - Aldana purchased Amazon stock for $6,000 on March 1, 2022 and sold the stock for $8,000 on December 31, 2022. - Aldana exchanged some land she held for investment for new land worth $140,000 on September 1 , 2022. Aldana originally purchased her land for $95,00010 years ago and the buyer assumed her remaining $10,000 mortgage on the land. Aldana is holding her new land for investment purposes. - Net ordinary income/loss from Aldana's business activities not listed above resulted in $50,000 of ordinary income. Further, Aldana's husband earned $200,000 in wages, they file jointly. - Aldana and her husband have a 10 -year-old daughter. They paid $6,200 in after school childcare during the year. - Aldana and her husband have $23,000 of qualifying itemized deductions. 2023 Activity - Furniture in Aldana's warehouse was destroyed in a casualty on June 15, 2023. Her amazing insurance policy paid off and she received $72,000 in proceeds. The furniture was originally purchased for $70,000 November 1, 2019 (only asset purchased in 2019 and Aldana did not utilize $179 or bonus depreciation in 2018). - Aldana placed a new coffee machine (machinery) into service on January 10, 2023 to replace the coffee machine that was destroyed in the fire. The machine cost $50,000. - Aldana received the $55,000 payment from the buyer of the machine she sold in 2022 plus her interest payment of $1,200. - Aldana purchased $4,000 in Nordstrom stock on May 1,2023 , but ended up selling it on November 1 , 2023 for $5,000. - Aldana sold the land she received in the September 1, 2022 exchange for $130,000 on June 1, 2023. - Net ordinary income/loss from Aldana's business activities not listed above resulted in $80,000 of ordinary income. Further, Aldana's husband earned $200,000 in wages, they file jointly. - Aldana and her husband have a 10-year-old daughter. They paid $6,500 in after school childcare during the year. - Aldana and her husband have $23,000 of qualifying itemized deductions. Notes Please assume 2022 rates and standard deduction amounts will remain in place for 2023. In addition, you may ignore the Qualified Business Income Deduction. Deliverable Prepare a workpaper that will calculate Aldana's 2022 and 2023 taxable income and tax liability based on the transactions listed above. In addition, write an email to Aldana explaining how the various 51231 gain/loss and capital gain/loss netting rules impact the tax rate that she will ultimately pay on these transactions as well as any other key transactions that will result in minimizing her tax liability. Aldana does not have a tax background so be sure to write the email in a way someone without a tax background will understand. Aldana Klaus has just hired you to help with her tax needs. She was previously doing her taxes on her own and admits that she might not have been doing herself any favors. Aldana owns a German bakery that is treated as a sole proprietor for tax purposes and wants your help determining the tax liability impact from her activities below. Now that she has you on board, she is looking to minimize her tax liability each year, where possible. Aldana is married and has no dependents. 2022 Activity - $20,000 of proceeds from insurance were received after a break in resulted in the loss of her fancy espresso machine (machinery) on October 31,2022 . The property was placed into service on October 10,2021 and cot $47,150. (Two assets were placed into service in 2021 the machinery listed here and the furniture in the bullet point below. In 2021 Aldana did not utilize $179 or bonus depreciation). - Not sure when the dining area of her caf would reopen, Aldana sold the tables \& chairs in her caf to help keep her business afloat on February 3,2022 for $5,000. The furniture was placed into service on January 29, 2021 and cost Aldana $22,000. - Aldana sold equipment used at the caf on November 1, 2022. Aldana purchased and placed the equipment into service on April 1, 2020 (it was the only asset she placed into service in 2020). Aldana paid $55,000 in cash plus took out a mortgage of $55,000 to purchase the machine. In 2020 Aldana did not utilize $179 or bonus depreciation. The seller gave her $5,000 cash plus they will pay her $55,000 on November 1,2023 and $40,000 on November 1,2024 plus $1,200 and $1,000 of interest, respectively. - On November 1, 2022 Aldana sold Johnson \& Johnson stock for $35,000. She had purchased 4 years earlier for $49,000. - Also on November 1, 2022, Aldana sold stock she inherited from her grandmother on March 1, 2022 for $20,000. Her grandmother purchased the stock for $27,000 in January of 2022 and it was worth $24,000 on the date she died. - Aldana purchased Amazon stock for $6,000 on March 1, 2022 and sold the stock for $8,000 on December 31, 2022. - Aldana exchanged some land she held for investment for new land worth $140,000 on September 1 , 2022. Aldana originally purchased her land for $95,00010 years ago and the buyer assumed her remaining $10,000 mortgage on the land. Aldana is holding her new land for investment purposes. - Net ordinary income/loss from Aldana's business activities not listed above resulted in $50,000 of ordinary income. Further, Aldana's husband earned $200,000 in wages, they file jointly. - Aldana and her husband have a 10 -year-old daughter. They paid $6,200 in after school childcare during the year. - Aldana and her husband have $23,000 of qualifying itemized deductions. 2023 Activity - Furniture in Aldana's warehouse was destroyed in a casualty on June 15, 2023. Her amazing insurance policy paid off and she received $72,000 in proceeds. The furniture was originally purchased for $70,000 November 1, 2019 (only asset purchased in 2019 and Aldana did not utilize $179 or bonus depreciation in 2018). - Aldana placed a new coffee machine (machinery) into service on January 10, 2023 to replace the coffee machine that was destroyed in the fire. The machine cost $50,000. - Aldana received the $55,000 payment from the buyer of the machine she sold in 2022 plus her interest payment of $1,200. - Aldana purchased $4,000 in Nordstrom stock on May 1,2023 , but ended up selling it on November 1 , 2023 for $5,000. - Aldana sold the land she received in the September 1, 2022 exchange for $130,000 on June 1, 2023. - Net ordinary income/loss from Aldana's business activities not listed above resulted in $80,000 of ordinary income. Further, Aldana's husband earned $200,000 in wages, they file jointly. - Aldana and her husband have a 10-year-old daughter. They paid $6,500 in after school childcare during the year. - Aldana and her husband have $23,000 of qualifying itemized deductions. Notes Please assume 2022 rates and standard deduction amounts will remain in place for 2023. In addition, you may ignore the Qualified Business Income Deduction. Deliverable Prepare a workpaper that will calculate Aldana's 2022 and 2023 taxable income and tax liability based on the transactions listed above. In addition, write an email to Aldana explaining how the various 51231 gain/loss and capital gain/loss netting rules impact the tax rate that she will ultimately pay on these transactions as well as any other key transactions that will result in minimizing her tax liability. Aldana does not have a tax background so be sure to write the email in a way someone without a tax background will understand

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