11 PROBLEMS 1. Determine the deductibility under $$ 162 and 195 of expenses incurred in the following situations. (a) Tycoon, a doctor, unexpectedly inherited a sizeable amount of money from an eccentric millionaire. Tycoon decided to invest a part of her fortune in the development of industrial properties and she incurred expenses in making a preliminary investigation. (b)_The facts are the same as in (a), above, except that Tycoon, rather than having been a doctor, was a successful developer of residential and shopping center properties. (c) The facts are the same as in (b), above, except that Tycoon, desiring to diversify her investments, incurs expenses in investigating the possibility of purchasing a professional sports team. (d) The facts are the same as in (c), above, and Tycoon purchases a sports team. However, after two years Tycoon's fortunes turn sour and she sells the team at a loss. What happens to the deferred investigation expenses? 2. Law student's Spouse completed computer programming school just prior to student entering law school. Spouse contacts a talent search firm to help find a position as a part-time computer programmer (.e. In independent contractor). Consider whether Spouse's search fees are deductible in the following circumstances: (a) The firm is unsuccessful in finding Spouse a position. (b) The firm is successful in finding Spouse a position. -Same as (b), above, except that the firm's fee was contingent upon its securing a position for Spouse and the payments will not become due until Spouse has begun working. (d) Same as (a) and (b), above, except that Spouse previously worked as a computer programmer in Old Town and seeks a position in New Town where student attends law school. (e) Same as (d), above, except that the firm is successful in finding Spouse a position in New Town as a sales representative. Law student's Spouse completed computer programming school just 2. prior to student entering law school. Spouse contacts a talent search firm independent contractor). Consider whether Spouse's search fees are help find a position as a part-time computer programmer (i.e., an deductible in the following circumstances: (a) The firm is unsuccessful in finding Spouse a position. (b) The firm is successful in finding Spouse a position. @_Same as (b), above, except that the firm's fee was contingent upon its securing a position for Spouse and the payments will not become due until Spouse has begun working. (d) Same as (a) and (b), above, except that Spouse previously worked as a computer programmer in Old Town and seeks a position in New Town where student attends law school. (e) Same as (d), above, except that the firm is successful in finding Spouse a position in New Town as a sales representative