Homework
You are a manager at a local accounting firm, and Kate and Sam Smith are your clients. It is the end of the year, and they have come to ask your advice on some tax planning strategies, as well as help preparing their tax return.
Write a 4 pages letter to Kate and Sam Smith which:
Walks them through their current year tax return.
1) Detail which expenses they incurred that were nondeductible for tax purposes and explain why. The Smiths have always itemized deductions instead of taking the standard deduction on their tax return. Explain how this may no longer be the best tax strategy due to changes in tax law under the TCJA.
2) Regarding the investment opportunities you calculated, explain:
a) Which investment opportunity you would recommend.
b) What the conversion tax planning strategy is, and which of these investments employ this strategy.
c) How "implicit taxes" may limit the benefits of the conversion strategy.
3) Kate and Sam are considering purchasing a vacation home. They plan on spending several months each year vacationing in the home and renting out the property the rest of the year. Provide an overview of the key tax considerations they should take into account when making this decision.
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.