Hi, How’s everything? Here is another project that i need your


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Hi, How’s everything? Here is another project that i need your help with 🙂 See instructions below and let me know if you are interested. Review the article Skip the dorm, buy your kid a condo previously featured in Market Watch in The Wall Street Journal. This article closely ties with information covered in Chapter 7 regarding passive activity losses and rental activities. The article provides a scenario on how a transaction can be structured to deliver a great tax result as well as other economic benefits. Write a response to this article indicating the following: 1. Whether or not you believe this to be a good tax planning strategy and why. 2. Should you be audited by the IRS, do you see any problem with this tax strategy? 3. Do you see any modifications to this strategy that will deliver a similar tax benefit? Directions for either article : Read article and write a response using Microsoft Word addressing the questions above. You are welcome to use another outside source/sources. Remember that you can also use the online WSJ website searchbar and input search terms to see any related articles that have been published in the last 90 days. Just remember to cite your source at the bottom of your article response. Your Turn It In similarity % should be less than 15%. Needs to be more than 650 words not including references. Article Skip the dorm, buy your kid a condo Published: May 14, 2012 12:01 a.m. ET Prices in many real-estate markets may be close to bottoming out. We hope. So the old adage about buying low may be something to consider if you have a kid who will soon be heading off to college. The idea is to buy a condo for the kid to live in while attending school. That way, you’ll avoid paying through the nose for a dorm room or apartment with no hope of any profit. And if you buy a condo that has some extra space, you can rent it out to your kid’s friends and offset some of the ownership cost. Lots of parents have made good money by following this strategy for the four or five or, God forbid, six years their kids spent in college and then selling the condo after graduation. Of course, the longer you can hold onto the property, the better the odds of cashing out for a profit. The other key factor to consider is the tax benefits. Here’s what you need to know. Deducting college condo ownership expenses The tax rules generally prevent you from deducting losses incurred from owning and renting out a residence that’s used more than a little bit by you or a member of your immediate family. However, a favorable exception applies when you rent at market rates to a family member who uses the property as his or her principal home. In this case, you can deduct tax losses from the rental activity (subject to the passive loss rules, which I’ll explain later). This beneficial loophole is open for you if you buy a condo and rent it out to your college-going child (and roomies, if any) at market rates. You can deduct the mortgage interest and real-estate taxes. If you pay mortgage points, you can amortize them over the term of the loan. You can also write off all the other operating expenses—like utilities, insurance, association fees, repairs and maintenance, and so forth. As a bonus, you can depreciate the cost of the building (not the land) over 27.5 years, even while it is (we hope) increasing in value. So where will your poverty-stricken son or daughter get the money to pay you market rent for the condo? The same place he or she would get the cash to pay for a dorm room or an apartment rented from some third party. In other words, from you! You can give your kid up to $13,000 annually without any adverse federal tax consequences. If you’re married, you and your spouse can together give up to $26,000. Your child can use that money to write you monthly rent checks. Just make sure he or she actually sends the checks and make sure they say they are for rent. Also, it’s best if you open up a separate checking account to handle the ren

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