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RESEARCH PROBLEM 1Sam Adams is a CPA who is an aspiring actor In 2011 his adjusted gross income (before any deductions for performing arts expenses) was 42000 and was from the following sources

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RESEARCH PROBLEM 1Sam Adams is a CPA who is an aspiring actor In 2011 his adjusted gross income (before any deductions for performing arts expenses) was 42000 and was from the following sources;RESEARCH PROBLEM 1;Sam Adams is a CPA, who is an aspiring actor. In 2011, his adjusted gross income (before any deductions for performing arts expenses) was $42,000 and was from the following sources;CPA practice $30,000;Acting jobs (4 employers) 12,000;Expenses associated with his acting career were $9,000. Sam deducted these expense under section 162 and classified them as deduction for AGI under section 62 (a)(2)(B).;The IRS audited the return and stated that the expenses are not eligible for treatment under section 62(a)(2)(B) and should be classified as miscellaneous itemized deductions (subject to the 2%-of-AGI floor). According to the IRS, section 62(a)(2)(B) is not available because Sam exceeded the AGI ceiling under section 62 (b)(1)(C).;Sam argues that he only earned $12,000 from acting, $4,000 below the threshold. Therefore, section 62 is available to him.;What is the appropriate tax treatment? Support your answer with proper tax authority.;Tax Research Memorandum;Facts: Stated in Problem;Issues;Conclusion;Keywords used in research;Reasoning;Full citations of the tax sources relied upon for conclusion;Be sure to attach a copy of the tax sources

 

Paper#31213 | Written in 18-Jul-2015

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