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Tax Cases

In: Business and Management

Submitted By hosu
Words 517
Pages 3

TO: Act490 students

DATE: September 8, 2015

RE: Research Assignment (Fall 2015)

Below are three tax research problems. You must complete two of the three research problems. Your analysis must be emailed to me no later than November 30, 2015. Completion of the problems makes up 50% of your internship grade.

You must use the RIA Checkpoint database and correctly cite information from the Internal Revenue Code, Regulations, and tax court cases to support your conclusions. RESEARCH PROBLEM #1

Tranquility Funeral Home, Inc., your client, is an accrual basis taxpayer that sells preneed funeral contracts. Under these contracts, the customer pays in advance for goods and services provided at the contract beneficiary’s death. These payments are refundable at the contract purchaser’s request, pursuant to state law, anytime until the goods and services are furnished. Tranquility, consistent with its financial accounting reporting, includes the payments in income for the year the funeral service is provided. The IRS agent insists that the payments be prepaid income subject to tax in the year of receipt. Write a letter to Tranquility that contains your advice about how the issue should be resolved. The client’s address is 400 Rock Street, Memphis, TN 38152.

RESEARCH PROBLEM #2 Esther owns a large home on the East Coast. Her home is surrounded by large, mature oak trees that significantly increase the value of her home. In August 2014, a hurricane damaged many of the trees surrounding her home. In September 2014, Esther engaged a local arborist to evaluate and treat the trees, but five of the largest trees were seriously weakened by the storm. These trees died from disease in 2015. Esther has ascertained that the amount of the casualty loss from the death of the five trees...

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