MrAnd MrsMaxwell Are Equal Partners in Family Partnership

question 80

Multiple Choice

Mr.and Mrs.Maxwell are equal partners in Family partnership.The Maxwell's marginal tax rate is 35%.Next year,the partnership is expected to generate $200,000 of ordinary income.The Maxwells are considering transferring 20% interests in the partnership to each of their children.Their daughter,Melissa,has a 15% marginal tax rate.Their son,Mark,has a 25% marginal tax rate.Calculate the expected annual tax savings to the family from the proposed transfer of partnership interests.

• A)$14,000
• B)$28,000
• C)$12,000
• D)$16,000

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