ACC530-BE Tax Research Memo #1 PDF

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Tax memo assignment 1....

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1 Running head: MEMO #1

Chew

Tax Research Memorandum #1

Ebony Chew ACC 530-BE Taxation for Business Entities Professor Gary Conlay June 14, 2021

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Chew

June 14, 2021 Dear Jerry, The memorandum is a summary of the personal income tax changes throughout the year. Important Facts Jerry can deduct his moving expenses as personal expenses and to do so he must meet three requirements; meet the time test, meet the distance test, and must move closely related to the start of work (Deducting moving expenses, 2014, p. 1). His warehouse must be at least 50 miles from his old home and if he meets the distance he will qualify for the test. Because he is self-employed, he must work full-time for a total of at least 78 weeks during the first two years at the new job site (Deducting moving expenses, 2014, p. 1). Afterward, he can deduct the expenses since he is moving household items in which he will also be able to deduct travel expenses as well (Deducting moving expenses, 2014, p. 1). ISSUE 1: The miscellaneous income for Jerry. ISSUE 2: Taxing the gifts. ISSUE 1 Due to jerry selling his items at a garage sale becomes recognized as a nontaxable loss not receiving again the original price on the items. As well as according to the IRS it is not required to report the amount of money, he made in sales to them as it is placed as miscellaneous income. Therefore, the nontaxable loss on the garage sales does not need to be provided daily and the items listed can no longer sell above the original price (Deducting moving expenses, 2014, p. 1). ISSUE 2

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Chew

Section 26 U.S. Code § 2503 - Taxable gifts Jerry is not required to pay taxes on the gift he received by Mike. In the case of the gift made to any person by the donor during the calendar year, the first $10,000 of such gifts to such person shall not be included in the total amount of gifts made during such year (Cornell Law School, n.d., p. 1). Jerry can avoid paying taxable interest due to mike gifting him the money.

Sincerely,

Ebony Chew

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Chew References Page

C. (n.d.). 26 U.S. Code § 2503 - Taxable gifts. Retrieved June 14, 2021, from https://www.law.cornell.edu/uscode/text/26/2503 Deducting Moving Expenses. (2014, August 18). Retrieved June 14, 2021, from https://www.irs.gov/newsroom/deducting-moving-expenses...