24 Mar Tax Research Assignment
Tax Research Assignment
This tax research Assignment is a Capstone Assignment, designed to test your ability to apply the tax research techniques learned throughout this course. Using CCH IntelliConnect exclusively, in 5–7 pages (double spaced), you must address each of the following cases:
Case 1
Sandra incurred a 95-mile round-trip commute every day, mainly because she could not get along with her supervisor at the sales office located 4 miles from her home. Sandra works under a 1-year contract, and her assignment to the nearer office is affirmed in the current year’s contract, but management has allowed her to travel to the more distant location. How many deductible commuting miles does Sandra accumulate on a work day?
Case 2
A local accounting firm recently remodeled its offices. In addition to new office furniture and computers, the company purchased six large paintings from a local art gallery. These paintings are more than 120 years old and cost more than $110,000. The paintings are on display in the offices alongside more recent paintings by lesser-known artists. Are the paintings depreciable for tax purposes?
Case 3
Thomas Grobel works as a radio talk show host for Listen Inc. In the current year, Thomas generated substantial income from his employment. His wages from Listen were approximately $260,000. The show is recorded 4 days per week, and recording lasts only a few hours each day. The crew of writers and Thomas’s ability to effortlessly record the spots without errors yields him a very high amount of compensation for a short 20-hour work week. Thomas found a way to use that extra time by becoming, in his words, a “professional slot machine gambler.” On approximately 55 days during the current year, Thomas played the slots in casinos in and around southern Mississippi, winning a total of $104,000. However, during those same 55 days, Thomas lost $116,000. Because of the level of play and money spent at the casinos, Thomas was probably one of the top 1 percent or 2 percent of gamblers in all of southern Mississippi. In fact, he was frequently invited to slot machine tournaments based on his gambling and celebrity status.
Thomas also kept meticulous records of his gambling endeavors. He had detailed books and records that tracked the amounts played each day, the amounts won and lost, and various other expenses incurred. It seemed clear that Thomas took his gambling very seriously. In previous years, Thomas had played the slots less frequently but had managed to generate net gambling winnings (his wins exceeded his losses) and truly believed he could make money playing slots professionally. On his current year tax return (Schedule C of Form 1040—Profit or Loss from Business), Thomas reported the following:
Gross income $104,000
Car and truck expenses (2,323)
Supplies (212)
Travel (400)
Other expenses:
Gambling losses (116,000)
Telephone expenses (65)
Net loss $(15,000)
Provide your opinion on the proper treatment of Thomas’s gambling activities as it relates to calculating his taxable income (i.e., what is the taxable income or loss from Thomas’s gambling). For the purposes of this analysis, you may assume that his gambling activities rise to the level of a trade or business. You may also assume that all Thomas’s expenses are ordinary and necessary business expenses that are fully supported and directly related to his gambling business.
Case 4
Sing Ali, a single 25-year-old, recently completed her undergraduate degree in accounting at National University of Vietnam in Hanoi. She applied to and was accepted into Southern Washington University, located in Seattle, Washington, to pursue a master’s degree in taxation. She received her F-1 student visa and arrived in the U.S. in the summer of 2013 and started her courses almost immediately. She was extremely excited because this was her first trip to the United States. Although Sing was an exceptionally bright student, she was thoroughly enjoying the Seattle lifestyle and took only enough courses to maintain her full-time student classification. As a result, it was going to take Sing a little longer to complete her master’s degree in taxation. Although Sing missed her family and friends back in Vietnam, international travel was very expensive, and so she returned home only on limited occasions. Her international travel schedule was as follows:
Arrival in the United States Departure from the United States
08/12/2013 12/25/2013
01/06/2014 5/12/2014
06/10/2014 12/26/2014
01/04/2015 –
Sing remained in the United States from January 4, 2015 through the end of 2016. During 2016, Sing managed to get an on-campus job that paid her $5,000 as compensation for working as a teaching assistant for a professor at SWU. Sing noticed that she had income tax and FICA taxes withheld from her paycheck. When she received her Form W-2 statement in early 2017, she realized that she needed to file a United States tax return to get back her withholding.
How is Sing going to be treated for U.S. tax residency purposes? Is Sing’s income from her student job taxable in the United States? Is Sing subject to FICA taxes?
IMPORTANT: These cases are NOT to be addressed in tax file memo format. This should be compiled into ONE 5–7-page document in APA format. For ease of reading, please use the headings and sub-headings listed below when formatting your paper. A reference list is not required, however, you must properly cite all laws, regulations, and rulings at the end of each case in accordance with the formats presented in the text. You should use appropriate laws, regulations, and rulings to support all analysis and conclusions. This is not an opinion assignment, but an assignment based on fact. Submit your analysis in a 5–7-page Word document with your last name in the title.
Paper Format
Case 1
Facts
Laws and Analysis
Conclusions
Citations
Case 2
Facts
Laws and Analysis
Conclusions
Citations
Case 3
Facts
Laws and Analysis
Conclusions
Citations
Case 4
Facts
Laws and Analysis
Conclusions
Citations
Click here to access the CCH database – (provided through the Library- http://library.kaplan.edu/omnitax)
Here is the grading rubric for this Assignment.
Directions for Submitting your Assignment
Compose your Assignment in a Word document and save it as Username AC560 Unit 5 Assignment (Example: JSmith AC560 Unit 5 Assignment.doc). Submit your file by selecting the Unit 5: Assignment Dropbox by the end of Unit 5.
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