A. Penelope orally promises her daughter, Susan, that she will give her a tract
ID: 360684 • Letter: A
Question
A. Penelope orally promises her daughter, Susan, that she will give her a tract of land for her home. Susan, as intended by Penelope, gives up her homestead and takes possession of the land. Susan lives there for six months and starts construction of a home. Is Penelope bound to convey the real estate?
B. Ethan, knowing that his son, Robert, desires to purchase a tract of land, promises to give him the $25,000 he needs for the purchase. Robert, relying on this promise, buys an option on the tract of land. Can Ethan rescind his promise?
1. Highlight the pertinent facts;
2. Identify the issue of law posed by the case problem;
3. What should be the decision in the case?
4. The reasoning for such decision.
Explanation / Answer
Ms. Susan Smart,
USA.
Subject: Tax Return for Year 2015.
Dear Madam,
Based on the information provided by you we have made necessary calculations and are hereby attaching you the tax return calculation on your Income for the year 2015.
You have mentioned that you have sold the seld occupied property on July 1, 2015 at $1,100,000. This income is excluded from your income as you owned your home and lived in it for at least 2 years out of the 5-year period leading up to the sale.But in this case you cannot claim the deduction for depreciaition as that was a self occupied preperty for 2015.
The normal calulation tax based on your income is as follows:
It looks like you will owe additional tax in the amount of $8719 based on the data you have submitted.
Also we advise you to filke Form 1040 relating to the income arising from sale o
Filing Status: Single Dependents: 1 Exemptions: 2 Exemption Value: 8000 Income: 70000 Adjustments to Income: 0 Adjusted Gross Income(AGI): 70000 Standard Deduction: 6300 Itemized Deduction: 0 Taxable Income: 55700 Tax: 9719 Credits: 1000 Other Taxes: 0 Payments: 0 Your Tax Bracket: 25% Your Effective Tax Rate: 17%