LO 4-2 Compare the potential tax savings of an income shift from one entity to another if the entities are subject to: A progressive income tax system with rates from 5 percent to 19 percent. A progressive income tax system with rates from 10 percent to 50 percent. A 20 percent proportionate income tax system. As discussed in Chapter 3, the IRS carefully scrutinizes transactions between related parties. Several different Code sections define which taxpayers are considered related parties. Suppose that Marsha and Jan are sisters. Are they considered family members and, therefore, related parties under Section 318(a)(1)? How about under Section 267(b)(1)? LO 5-1 One of your clients is planning to sell a piece of raw land and expects to incur a substantial gain on the sale. He has asked you to determine whether this gain will be considered capital gain or ordinary income. List five specific questions you should ask your client to gather more information prior to beginning your research