Gary and Gretas Corporation Research Paper Example | Topics and Well Written Essays - 500 words

Gary and Gretas Corporation - Research Paper ExampleGary and Greta have operated a spillage for the previous five years meaning that their positive expenses exceed the total income hence having a loss for purposes of tax. Unless my client is a loss attributing qualifying individuals, they will not be able to pass the loss (Hoffman, et, al, pg26). Gary and Greta have adapted to the use of the losses from these rental assets to offset the rental income they have been charging their corporation for operating in their home. My client has been carrying losses forward (Barkas, pg 41).The cash in ones chips three individual tax return, the grumpy have shown income from leasing office space to their corporation of $40,000, $24,000 and $22,000 losses. Losses incurred in the rental properties have been in a tautological of the proceeds from the rent of the offices hence the duo has a loss carryforward of some amount, section 448 (d) (2). They did offset the lease income with the losses fro m the rental properties (Brownlee, pg 20) section 6013.The corporation is an entity that is legally established under companys laws. Qualities as a corporation for purposes of tax are based on the form of companies in most onerous jurisdiction (as defined in section 448(b) (2). Since Gary and Greta have a separate corporation, this means that tax may be imposed on the corporation as a separate entity from the two. In this scenario, both Gary and Greta are not subjected to tax on the corporations earnings until that point in which they are distributed. fit to the Tax Act, these corporations may be taxed on their incomes and properties. We have a specific range of rates on taxable income as defined in the system.The match needs to keep records that do relate to the cost, income, and expenses. For instance, a price at which the house, apartment building and the condo were purchased, depreciation accumulated and the security deposits (Brownlee, pg 20). They will withal be required t o keep records of expenses involved such as maintenance and repair costs, cleaning, advertising, real estate taxes and mortgage interest expenses.