Amee moved to the San Francisco Bay Area to work for a technology start up 25 years ago The start up eventually went public, and Amee is now one of the companys most senior and successful employees Amee has owned a house in Nob Hill for the past 20 years Although she is grateful that the house has increased in value significantly while she has owned it, her property tax bill also has increased substantially Given the $10,000 maximum regular tax deduction for state and local taxes imposed by the TCJA and the fact her property taxes create an AMT adjustment, Amee has decided that she would save a significant amount in AMT if she moved to a state with lower property taxes Identify the flaw in Amys logic with respect to the interaction of the $10,000 state and local tax deduction for regular tax purposes and the related AMT adjustment Celine is going to be subject to the AMT in 2019 She owns an investment building and is considering disposing of it and investing in other realty Based on an appraisal of the buildings value, the realized gain would be $85,000 Ed has offered to purchase the building from Celine with the closing date being December 29, 2019 Ed wants to close the transaction in 2019 because certain beneficial tax consequences will result only if the transaction is closed prior to the beginning of 2020 Abby has offered to purchase the building with the closing date being January 2, 2020 The building has a $95,000 greater AMT adjusted basis than regular tax basis For regular income tax purposes, Celine expects to be in the 32 tax bracket in 2019 and the 35 tax bracket in 2020 What are the relevant tax issues that Celine faces in making her decision During the year, Rachel earned $18,000 of interest income on private activity bonds that she had purchased in 2014 She also incurred interest expense of $7,000 in connection with amounts borrowed to purchase the bonds How do these amounts affect Rachels taxable income Could there be a related beneficial effect in calculating AMTI Explain Clint, a self employed engineering consultant, is contemplating purchasing an old building for renovation After the work is completed, Clint plans to rent out two thirds of the floor space to businesses and to live and work in the remaining portion Identify the relevant tax issues for Clint Sonja is considering the purchase and renovation of an old building She has heard about the tax credit for rehabilitation expenditures but does not know the specific rules applicable to the credit Explain the most important and relevant provisions for her Elaborate rules exist that require employers to prepay various types of Federal taxes Summarize the major issues that an employer must resolve if it is to comply with the requirements

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Posted on Sep 17, 2024

Amee moved to the San Francisco Bay Area to work for a technology start-up 25 years ago. The start-up eventually went public, and Amee is now one of the companys most senior and successful employees. Amee has owned a house in Nob Hill for the past 20 years. Although she is grateful that the house has increased in value significantly while she has owned it, her property tax bill also has increased substantially. Given the $10,000 maximum regular tax deduction for state and local taxes imposed by the TCJA and the fact her property taxes create an AMT adjustment, Amee has decided that she would save a significant amount in AMT if she moved to a state with lower property taxes. Identify the flaw in Amys logic with respect to the interaction of the $10,000 state and local tax deduction for regular tax purposes and the related AMT adjustment.
Celine is going to be subject to the AMT in 2019. She owns an investment building and is considering disposing of it and investing in other realty. Based on an appraisal of the buildings value, the realized gain would be $85,000. Ed has offered to purchase the building from Celine with the closing date being December 29, 2019. Ed wants to close the transaction in 2019 because certain beneficial tax consequences will result only if the transaction is closed prior to the beginning of 2020.

Abby has offered to purchase the building with the closing date being January 2, 2020. The building has a $95,000 greater AMT adjusted basis than regular tax basis. For regular income tax purposes, Celine expects to be in the 32% tax bracket in 2019 and the 35% tax bracket in 2020. What are the relevant tax issues that Celine faces in making her decision?

During the year, Rachel earned $18,000 of interest income on private activity bonds that she had purchased in 2014. She also incurred interest expense of $7,000 in connection with amounts borrowed to purchase the bonds. How do these amounts affect Rachels taxable income? Could there be a related beneficial effect in calculating AMTI? Explain.

Clint, a self-employed engineering consultant, is contemplating purchasing an old building for renovation. After the work is completed, Clint plans to rent out two-thirds of the floor space to businesses and to live and work in the remaining portion. Identify the relevant tax issues for Clint.

Sonja is considering the purchase and renovation of an old building. She has heard about the tax credit for rehabilitation expenditures but does not know the specific rules applicable to the credit. Explain the most important and relevant provisions for her.
Elaborate rules exist that require employers to prepay various types of Federal taxes. Summarize the major issues that an employer must resolve if it is to comply with the requirements.