Our biggest client is Trang Nguyen. Trang's only source of income is $40,000,000 of income from a partnership in which she materially participates in. She is single and her only itemized deduction is the $600,000 in property taxes she pays on her $45,000,000 principal residence located in Texas where she lives. She has been following Joe Biden's proposed tax act, the Build Back Better Act, since it was introduced in September and is very frustrated because it changes almost daily.
ISSUE: She has chosen the House Rules Committee version as amended on 11/04/2021, Based upon this version of the Act:
1) What will her highest federal marginal tax bracket be in 2022?
2) How much property taxes will she be able to deduct in 2021?