Mrs Franklin, who is in the 39 6 percent tax bracket, owns a residential apartment building that generates $80,000 annual taxable income She plans to create a family partnership by giving each of her two children a 20 percent equity interest in the building (She will retain a 60 percent interest ) ...

Taxable income from the apartment complex 80000 Mrs Franklins marg ...

Mrs. Franklin, who is in the 39.6 percent tax bracket, owns a residential apartment building that generates

Question:

Mrs. Franklin, who is in the 39.6 percent tax bracket, owns a residential apartment building that generates $80,000 annual taxable income. She plans to create a family by giving each of her two children a 20 percent equity interest in the building. (She will retain a 60 percent interest.) Mrs. Franklin will manage the building, and value of her services is $15,000 per year. If Mrs. Franklin’s children are in the 15 percent tax bracket, compute the tax savings from this income-shifting arrangement. (Ignore any payroll tax consequences.) Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...