Use the following scenario to complete the memo and letter activities for this lesson. During our annual tax preparation meeting on February 5th, Suzanne indicates that everything is going well and that she and her husband Johnny have moved out of their home. When pressed for more information Suzanne says that they exchanged their house for a condo. Suzanne states that there were no papers or real estate agents or attorneys involved at all. They just traded places with another couple who is now residing in the house. Additional Background: • Suzanne and Johnny purchased their house in 2001 for $174,900 • Suzanne and Johnny’s current mortgage on the house is $138,000 • Interest paid on that mortgage in the current year is $7,450 • Real estate tax on the house for the current year is $5,100 • Current Fair Market Value of the house is $259,000 • Current Fair Market Value of the condo is $350,000 • Real estate tax on the condo for the current year is $6,000 TASK: Research the tax laws that apply to the above facts and circumstances. Determine what really happened and what the tax ramifications may be. Identify the issues that must be addressed to provide the FIRM’s client with the best possible result from this transaction. Consider what consultation should be obtained to ensure that the client is compliant and protected. State your assumptions, propose your recommendations as to how the FIRM should proceed and provide your resources to support this position.