Ms$.$ Singh, who is in the $37$ percent tax bracket, owns a residential apartment building that generates

$$86,000$ annual taxable income. She plans to create a family partnership by giving each of her two

children a $15$ percent equity interest in the building. $($She will retain a $70$ percent interest.$)$ Ms$.$ Singh will

manage the building, and value of her services is $$16,000$ 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.$)$

Answer is complete but not entirely correct.

$\backslash$table$[[$Tax savings from this income$-$shifting arrangement,$$7,712$