Tax Research Assignment 3.

The facts for this assignment are as follow:

Mary and Bob have been married for 25 years. They are both college professors. Mary (50 years of age) makes $65,000 annually and Bob (60 years of age) makes $75,000 annually. Their oldest daughter is getting married. Bob and Mary would like to either 1) take out a second mortgage on their home (they can get an interest rate of 7 percent) or 2) withdraw funds from their IRAs or 3) sell their rental property. The cost of the wedding is $35,000. The equity in their home is $150,000; they have $80,000 in IRAs between the two of them and the basis of the rental property is $20,000. The rental property can be sold for $120,000. Mary and Bob want to know how they should finance the wedding and if tax implications will be a factor.

Your research assignment will be graded using the following criteria:

6. Recognition of the important facts and issues

7. Correct conclusion

8. Proper citation of relevant sources

9. Format, Spelling & Grammar

10. Clarity of writing

This is a tax research assignment. You must list each cited law in the authority section of the memo to file. You must have as your authority AT LEAST One IRC Internal revenue code section, One Regulation/Rev Rul/Rev Proc/or Private letter ruling AND One Court case. They must all be listed in authority section with a short explanation of what they do. Then each one must be used in the analysis section and how they relate to our tax situation/facts. Conclusion needs to be robust. Letter to client we never cite tax law or use complex tax law language. Restate the facts and use very simple language to explain their outcome.