· A married couple arrives at your office and is hoping to get tax advice for their situation. They have a 21-year-old daughter whom they support in her full-time college studies. The husband’s mother also lives with them and they support her in her daily living expenses. They do not understand whether they can report the daughter or mother as dependents and think they may benefit through a ‘married filing jointly’ status because they each make over $150,000 a year. They need your help!
. What kind of guidance would you provide to them in this situation?
. What additional facts would you need to know?
· Your client, Joan, has asked about the differences between the constructive receipt doctrine and the claim of right doctrine.
· Explain what each doctrine is by providing an example to help them understand the differences.
· This week we covered a wide variety of deductions both FOR and FROM Adjusted Gross Income (AGI). Choose a deduction, provide a brief description of the deduction, and identify whether it is ‘FOR’ or ‘FROM’ AGI. Explain if the deduction was impacted by the Tax Cuts and Jobs Act and, if so, how it was impacted.
· Calvin, a client of yours since you opened your practice, has over the past few years become very intrigued by investing in the stock market. He has interest-bearing securities and dividend-paying stocks. He also owns U.S. Securities. He is considering selling $400,000 in stocks. He does not know if he should sell the additional stock for a loss to help offset the stock sale of $400,000.
· Calvin called you to ask what tax consequences the interest and dividends will have along with the stock sale. What tax advice would you offer to Calvin in planning for this situation?