Please also answer question with tax codes and explanation as well. Mailings Rev

Question

Please also answer question with tax codes and explanation as well. Mailings Review View TNormal No Spadi... Heading 1 Heading 2 Title Paragraph Styles Research Assignment Mr. John Smith and Joan Smith are verysuccessful in their business. They own six office buildings and Joan Smith manages these buildings. They also own a services business-anS Corporation. The corporation generates three to four net taxable income. The building generate huge losses. Joan Smith also works as a consultant and makes $95,000 per year year. Question: How can they structure their business where they can deduct losses from buildings? IF up

Explanation / Answer

INCOME AND TAX PALNNING :

MR JOHN AND JOHN SMITH ARE DOING VERY WELL EXCEPT IN BUILDING , SIX OFFICE BUINDING ARE INCURRING LOSSES IN ORDER TO CAME OUT OF LOSSES FOLLOWING ARE OPTION AVAILABLE TO JOHN AND JOHN SMITH .

(1) They should try to increase rental income from building, in case if tenants are available and ready to pay higher rent.

(2) In order to inrease rental income , they must maintain buidings , it may require some outflow to be incurred on buildings.

(3) In case if it is not possible to increase rent than they should try to dispose loss incurring buildings and should inveset incoming fund in their prfilt making businesses so that overall revenue can be maximised.

(4) They should try to consolidate activity and should concentrate on profit making businesses and should not waste time on loss incurring businesses.

(5) They may also look on opportunity that how building can be used for their own business so that there expenses can be saved m if saving in expenses is higher than rental income than they should definately exercise this option.

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