Read the following: After several years of a difficult marriage, Ronald and Susan agreed to a divorce.
Question:
Read the following:
After several years of a difficult marriage, Ronald and Susan agreed to a divorce. As part of the property settlement, Susan transferred to Ronald corporate stock, a commercial building, and a personal residence. Ronald transferred other property to Susan, but the fair market value of the property was $500,000 less than the fair market value of the property Susan had transferred to him. To make the final settlement equitable, Ronald agreed to pay Susan $500,000 payable over 6 years at 6% interest. For several years, Ronald deducted the interest on his Federal income tax return as investment interest. Upon audit, the IRS disallowed the interest deduction, classifying it as nondeductible personal interest. Ronald believes the interest is deductible and has asked you to find support for the deduction. Write a letter with your findings to Ronald Martin, 950 Briarwood Drive, Herrin, IL 62948.
Answer the following questions by completing a search of the Internal Revenue Code (IRC):
•Which section and subsection of the IRC allows for the exclusion of gifts or inheritances received?
•Which section and subsection of the IRC allows a deduction for charitable contributions (general rule)? Are charitable contributions a deduction for or from AGI?
•Which section of the IRC provides for the determination of the amount and recognition of gain or loss on the sale or other disposition of property?