Fundamental Income Tax Issues PDF
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San José City College
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This document provides an outline for Unit 10 on Fundamental Income Tax Issues within the context of investment analysis for real estate decisions. It covers topics such as tax basis, cost recovery, and financial leverage.
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**Unit 10: Fundamental Income Tax Issues** **Unit Outline** Income taxes constitute a claim superior to that of equity investors, whose interest is a mere residual. The relevant measure of investment outcomes, therefore, is the value of after‑tax cash flows. This unit explains the nature and signi...
**Unit 10: Fundamental Income Tax Issues** **Unit Outline** Income taxes constitute a claim superior to that of equity investors, whose interest is a mere residual. The relevant measure of investment outcomes, therefore, is the value of after‑tax cash flows. This unit explains the nature and significance of key income tax issues surrounding the acquisition, operation and disposition of real property. A. Tax Basis: Its Nature and Significance B. The Initial Tax Basis C. Allocation of the Initial Tax Basis D. Adjustment of the Basis for Cost Recovery E. Other Adjustments to the Tax Basis F. After-Tax Cash Flows Forecasting. The continuing example of Maegen\'s Magic Manor is used at this point to illustrate income tax computations. G. Tax Consequences of Ownership Form. H. Tax Consequences of Financial Leverage I. Income Tax Credits for Property Rehabilitation J. Limitations on Deductibility of Losses K. Foreign Investors' Taxes L. Tax Consequences of Property Sales M. The Alternative Minimum Tax (AMT)
