Provide an explanation of the current federal estate tax law. Create a brief scenario using a hypothetical client who may need estate tax planning services soon. Provide a rationale for your responses.
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Provide an explanation of the current federal estate tax law. Create a brief scenario using a hypothetical client who may need estate tax planning services soon. Provide a rationale for your responses.
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- In choosing between taking the standard deduction and itemizing deductions from AGI, what effect, if any, does each of the following have? a. The age of the taxpayer(s). b. The health (i.e., physical condition) of the taxpayer. c. Whether taxpayers rent or own their residence. d. Taxpayers filing status (e.g., single, married, filing jointly). e. Whether married taxpayers decide to file separate returns. f. The taxpayers uninsured personal residence was recently destroyed by a wildfire (the region was declared a disaster area by the Federal government). g. The number of dependents the taxpayer can claim.Comment on the following items relative to tax planning strategies of a fiduciary entity. A. To reduce taxes for a typical family, should income be shifted to a trust or from a trust? Why? B. To reduce overall taxes, should a high-income, wealthy beneficiary be assigned to the first or second tier of trust distributions? Why?A paid tax preparer must demonstrate due diligence. Review the following scenario, and then choose the appropriate response. Cherylynn Johnson (58) comes in to your office to have her tax return prepared. She states that she wants to use the head of household filing status and claim the Earned Income Tax Credit (EITC). She also tells you that her dependent child is her granddaughter, Alana (12), who currently lives with her. All of the following are appropriate questions to ask or actions to take EXCEPT: Ask Cherylynn how long Alana has lived with her and inquire into the whereabouts of Alana's parents. Ask Cherylynn who paid most of the expenses of maintaining her home. Inform Cherylynn that she must provide you with documentation proving Alana lived with her before you can prepare the return. Inquire whether the IRS has ever denied or reduced Cherylynn's EITC in a prior year.
- Enzo is preparing a client's return. The taxpayer is claiming the Earned Income Credit (EIC), Child Tax Credit (CTC), Additional Child Tax Credit (ACTC), and the American Opportunity Tax Credit (AOTC). Which of the following best describes the actions Enzo must take to substantiate the taxpayer's eligibility for the credits?Choose the response that accurately completes the following sentence. To meet one of the due diligence requirements of a paid tax preparer, it is not enough to ask more questions; tax preparers must also:1. What do you think about estate taxes at the state level? How do we see this play out with retirees? 2. How does the Estate Tax affect the Business valuation/estate planning industry?
