Tax Research

Identification of issue(s)

Locating, analyzing, and properly citing authority Arriving at proper conclusion(s)

Tax Memo proper format for memo written with proper grammar, spelling etc.

Amy Jones and Tom White recently purchased their dream home, an oceanfront retreat costing $1.8M in February of this year. They put down $300,000 and financed the remainder with a traditional 30-year home mortgage at an interest rate of 2.75%. Amy and Tom are curious as to how this will impact their taxes since they have heard about the tax benefits of home ownership. Their anticipated property taxes are approximately $18,000 per year. Mortgage interest is expected to be about $34,000 this year and $40,000 next year. They will share in all expenses equally. Although they are currently not married, they are engaged and planning a wedding on the beach outside their new home on New Years Eve next year.

Prepare a tax research memo for Amy and Tom, discussing the tax issues at hand and the conclusion(s) reached. You should discuss available deductions for interest and taxes related to home ownership, deduction limitations (if any) and the impact of their marriage (i.e. how does the answer change). Your analysis should cite relevant primary authority including the Internal Revenue Code and any administrative and/or judicial authority that supports your conclusion(s). Provide recommendations if available alternatives exist.

HINT check the Sophy and Voss cases and AOD 2016-02