Your client Jon recently received a substantial inheritance from his deceased grandfather, who expressed in his will his desire that Jon invest at least 75% of the money in real estate (which is how Grandfather made his fortune). Jon is in the market for his first home. He plans to make a down payment of 20% of the homes purchase price and finance the rest with a mortgage. Jon also wants to purchase some investment property in the form of residential rental real estate. Moreover, Jon is thinking about starting a real estate development company to convert a 120-acre parcel of raw land, on which he owns an option to buy, into residential building lots. 1. Outline briefly the major federal income tax benefits Jon may expect from owning and ultimately selling a personal residence. 2.In connection with Jons ownership of the residential rental real estate, explain briefly what tax deductions he might expect to be able to offset against the projected rental income from the property or properties, and where in the Internal Revenue Code he might find the authority for such deductions? 3.Assuming Jon exercises the option to buy the raw land, discuss briefly the factors involved in the question of whether he will be considered to be in the trade or business of real estate development and what this might mean for Jon in terms of the tax treatment of the income he receives on the lot sales. 4.Jon mentions to you that someone at his club told him that it is important that he qualifies as a real estate professional for tax purposes. What do you tell him when he asks if this is true and if so, why?