Please respond to the Discussion topic. Take time to review the responses of you

Question

Please respond to the Discussion topic. Take time to review the responses of your classmates and provide your feedback.

Individuals who own homes may take a tax deduction for interest paid. Many individuals believe that this tax law discriminates against individuals who rent. Do you think this deduction is discriminatory? Explain and share your thoughts.

Additionally, gifts and inheritances have been excluded from gross income since 1913. Discuss the tax consequences of gifts made of property and any income produced by the property. What, if any, are the exclusions and taxable income according to Section 102?

Explanation / Answer

If the discussion has to be made, then every tax law makes a discrimination by rewarding a few and not rewarding few. Lets say for example child tax credit,earned child tax credit are rewards for the ones having children and discriminate the one without children, the tax brackets provided discriminate between high income earners and low income ones. Education Credits and relevant deductions discriminate the ones that go to work. Discrimination itself is giving a different treatment to some and not to some. But not all of that discriminations have a bad effect.
Coming to our case, some good rewards are provided in the tax law for those who buy homes certainly , which in a way is to encourage the individuals to own homes and enhance the earnings in the industry of construction, and thereby giving raise to economic activities in the market by providing home loans etc. Those who own a home, also need to pay property taxes etc. And its also not necessary that everyone who buys a home is being rewarded. There may be some people, who do not pay much interest on account of having constructed a small home with less pay, which in tax language is said to be your itemized deductions being lesser than the standard deduction, then there will be no tax benefit to the buyers.

2)Basically anything thats received as a gift is an event which is taxable. The income tax will be subject to the fair market value of the gift received. And the amount of tax depends on the marginal tax rate of the individual which provides for less income people to pay less tax and high income people pay more tax on the same gift. Any income that is produced by such a gifted property is also taxable during that year.
However any employee gifts that is any amount transfered by the employer for the benefit of employee shall not be exclided from the gross income.

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