Describe why the client was targeted for an irs audit

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Problem

You are a tax advisor and your client, Joaquin Smith, has reached out to you requesting some advice. She is a single taxpayer and full-time Tennessee resident who reported the following income items on her Form 1040 Individual Income Tax Return filed two years ago. W-2 wages (engineering services) Interest income from savings Dividend income from corporate stocks $75,000 $5,500 $12,500 Loss from real estate rental activities $50,000 Joaquin works full time as an engineer in her state of residency but owns commercial real estate in Louisiana. The expenses relating to this commercial real estate were much more than in previous years due to a substantial increase in repairs, maintenance, insurance, and property taxes. Joaquin coordinates all repairs and maintenance on the buildings and secures tenants for the building. Last year, Joaquin received notification that her Form 1040 from two years ago was under examination by the IRS. Upon completion of the examination, the IRS decided to limit the amount of the loss due to passive loss limitations to $25,000. Get the instant assignment help. Describe why the client was targeted for an IRS audit.

Reference no: EM133928451

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