“You are a CPA with an office

“You are a CPA with an office in NearLakes City and clients consisting primarily of professionals, entrepreneurs, and small business owners. John Smith, Esq., a practicing attorney with offices near yours, walks in your office andwants advice from you relating to a recent influx of cash he received as a result of winning a large jury verdict on behalf of his client in a personal injury case. His wife Jane Smith accompanies him during your meeting because shehas some additional tax planning advice to ask of you.RoleAfter reviewing John and Jane Smith’s points of view, it will be your turn as a tax professional to decide on the best course of action from a tax perspective on their issues. Prepare a three page memo (at least 300 words per page) toJohn and Jane Smith addressing the issues presented.Prepare a three page memo (at least 300 words per page) to John and Jane Smith addressing whether the issues presented above:1. John Smith tax issues:1. How is the $300,000 treated for purposes of Federal tax income?2. How is the $25,000 treated for purposes of Federal tax income?3. What is your determination regarding reducing the taxable amount of income for both (a) and (b) above?2. Jane Smith tax issues:1. What are the different tax consequences between paying down the mortgage (debt) and assuming a new mortgage (debt) for Federal income tax purposes?2. Can John and Jane Smith utilize a 1031 tax exchange to buy a more expensive house using additional money from John`s case?3. Does Jane have a business or hobby? Why is this distinction important?4. Would Jane (and John) realize better tax benefits if she had a separate business for her jewelry making activities?5. What tax benefits would John realize if he invested $15,000 in Jane`s jewelry making?6. Can Jane depreciate her vehicle or jewelry making equipment? How?3. John and Jane Smith tax issue:1. a. Should John and Jane file separate tax returns o”