Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 49

In each of the following independent situations, indicate whether the item generally would be a tax (T) or a non-tax (NT) consideration in solving a tax research or tax planning problem.
a. The taxpayer would like to set up a private foundation to reduce her annual income tax liability.
b. The taxpayer has a limited cash flow because of prior investments; therefore, he has a limited ability to make "tax-advantaged" investments.
c. The taxpayer wants to transfer as much of her property to her grandchildren as possible. However, she does not want any of the property to fall into the hands of the grandchildren's mother (her daughter-in-law).
d. The taxpayer lived through the Great Depression of the 1930s and does not like investments with any risk, such as owning stocks or bonds.
e. The taxpayer likes to maintain liquid investments, such as money market funds and certificates of deposit in insured banks and savings and loan institutions.