Mr.Allen,whose marginal tax rate is 39.6%,owns an office building that generates $100,000 annual taxable income.He plans to create a family partnership by giving each of his three children a 15% interest in the building.Mr.Allen will retain a 55% interest.Mr.Allen will manage the building,and receive a guaranteed payment of $20,000.If Mr.Allen's children are in the 15% tax bracket,compute the annual tax savings from this income-shifting arrangement.

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The Answer of Mr.Allen,whose marginal tax rate is 39.6%,owns an office building that generates $100,000 annual taxable income.He plans to create a family partnership by giving each of his three children a 15% interest in the building.Mr.Allen will retain a 55% interest.Mr.Allen will manage the building,and receive a guaranteed payment of $20,000.If Mr.Allen's children are in the 15% tax bracket,compute the annual tax savings from this income-shifting arrangement.

MrAllen,whose Marginal Tax Rate Is 39