Assume you the staff tax accountant at Johnson & Co. CPAS. Your supervisor, Jane Johnson Tax...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Assume you the staff tax accountant at Johnson & Co. CPAS. Your supervisor, Jane Johnson Tax Manager, has asked you to research a question and prepare a memo to a client file relating to an issue that has come up. A prospective client named Adam Andrews, said during an interview with Jane that he won a "gift" on August 1, 2020 (a shopping spree valued at $500) for participating on a television game show, but the $500 was not included in 2020 taxable income by his prior tax preparer. Despite not answering any questions correctly during the game, the television station awarded him the shopping spree at a local grocery store as consolation for participating. The client believed since the televison station called it a gift in the paperwork he received, it was nontaxable. Further, based upon his limited understanding of tax law, since the prize or award was valued under $600, the television station was not required to report to the IRS on 2020 Form 1099MISC, and thus IRS would never learn about the "gift", so an issue as to whether it was taxable would never come up. Prepare an memo which will be used internally by the firm to document your research and conclusions regarding this issue. Similar to the sample memo provided by Instructor, your memo should include separate sections for date, preparer name, reviewer name, subject, facts, issues, authorities, conclusions, and analysis. Aside from determining whether the "gift" should have been reported as taxable income, address whether the firm has any obligations to inform him about corrective action that may be required with respect to the prior return. Assume you the staff tax accountant at Johnson & Co. CPAS. Your supervisor, Jane Johnson Tax Manager, has asked you to research a question and prepare a memo to a client file relating to an issue that has come up. A prospective client named Adam Andrews, said during an interview with Jane that he won a "gift" on August 1, 2020 (a shopping spree valued at $500) for participating on a television game show, but the $500 was not included in 2020 taxable income by his prior tax preparer. Despite not answering any questions correctly during the game, the television station awarded him the shopping spree at a local grocery store as consolation for participating. The client believed since the televison station called it a gift in the paperwork he received, it was nontaxable. Further, based upon his limited understanding of tax law, since the prize or award was valued under $600, the television station was not required to report to the IRS on 2020 Form 1099MISC, and thus IRS would never learn about the "gift", so an issue as to whether it was taxable would never come up. Prepare an memo which will be used internally by the firm to document your research and conclusions regarding this issue. Similar to the sample memo provided by Instructor, your memo should include separate sections for date, preparer name, reviewer name, subject, facts, issues, authorities, conclusions, and analysis. Aside from determining whether the "gift" should have been reported as taxable income, address whether the firm has any obligations to inform him about corrective action that may be required with respect to the prior return.
Expert Answer:
Answer rating: 100% (QA)
MEMORANDUM To Johnson Co CPAs Client File From Staff Tax Accountant Date March 1 2021 Re Taxability of Television Game Show Gift Facts Adam Andrews a ... View the full answer
Related Book For
Income Tax Fundamentals 2015
ISBN: 9781305177772
33rd edition
Authors: Gerald E. Whittenburg, Martha Altus-Buller, Steven Gill
Posted Date:
Students also viewed these accounting questions
-
The CFO has asked you to research which external financial databases might be of value to the accounting department. Go online, search, and then prepare a list of external databases related to...
-
Your supervisor has asked you to research a potential tax deduction for a client, Nancy Fradette. Nancy is a seat-filler at a number of the award shows that are filmed in the greater Los Angeles...
-
Your supervisor has asked you to research a potential tax deduction for a client, Nancy Fradette. Nancy is a seat-filler at a number of the award shows that are filmed in the greater Los Angeles...
-
a) Verify the above differential equation is not exact. b) Find an integrating factor that will make the differential equation exact. Verify your work. c) Solve the differential equation (implicit...
-
In Problem 13.4 on page 469, you used efficiency ratio and total risk based capital to predict ROA at a community bank (stored in CommunityBanks). Using the results from that problem, a. determine...
-
What is the difference between technological alliances and market alliances? Provide examples of both types of alliances and how they can increase a firms sales.
-
What data did Semmelweis collect, and what was the significance of those data as related to performance improvement in the present-day hospital?
-
Wonder Bakery manufactures two types of bread, which it sells as wholesale products to various specialty retail bakeries. Each loaf of bread requires a three-step process. The first step is mixing....
-
How do contingent workforce arrangements, such as outsourcing and gig economy platforms, disrupt traditional hierarchical structures and necessitate innovative approaches to talent management and...
-
The university computer lab's director keeps track of the lab usage, as measured by the number of students using the lab. This particular function is very important for budgeting purposes. The...
-
Lathrop has a 5%, $40,000 note receivable from the sale of merchandise on January 1, 2020. The note was issued when the market rate was 5%. The note is due December 31, 2024. Annual interest is due...
-
Each student should obtain the statement of cash flows from the annual report of a favorite company. Annual reports are usually downloadable from the website of a public company, or are otherwise...
-
Giving justifications for all your decisions, advise the board of the Matthew Humberstone Foundation Hospital on all aspects of marketing on social media covered in this chapter. Alternatively,...
-
When the competition is stiff, the product, service, and price may not be the deciding factor. What the buyer believes about the competitor may be controlling. The following are statements made by...
-
What does the time series state when graphing from the Financial Crisis to the current day for each of the asset classes?
-
What are the Returns and Risks currently for the different asset classes?
-
A rectangle has an area of 32 square feet and a perimeter of 24 feet. What is the shortest of the side lengths, in feet, of the rectangle? F. 1 G. 2 H. 3 J. 4 K. 8 2 answers
-
Evaluate each logarithm to four decimal places. log 0.257
-
1.Which of the following items retains its character when passed through to share-holders of an S corporation? a. Wages paid b. Accelerated depreciation c. Net long-term capital gains d. Advertising...
-
General Corporation (P.O. Box 4563, Houston, TX 77003; EIN 12-3456789) paid Louise Bryant, an employee who lives at 5471 DeMilo Street, Houston, TX 77052, wages of $24,554 in 2014. The withholding...
-
a. Wilson filed his individual tax return on the original due date, but failed to pay $700 in taxes that were due with the return. If Wilson pays the taxes exactly 2 months late, calculate the amount...
-
What is the daughter nucleus of the decay? The Curiosity rover sent to explore the surface of Mars has an electric generator powered by heat from the radioactive decay of \({ }^{238} \mathrm{Pu}\), a...
-
Because the decay products in the above fission reaction are neutron rich, they will likely decay by what process? A. Alpha decay B. Beta decay C. Gamma decay The uranium isotope \({ }^{235}...
-
What statement can be made about the masses of atoms in the above reaction? A. \(m\left({ }_{92}^{235} \mathrm{U} ight)>m\left({ }_{56}^{141} \mathrm{Ba} ight)+m\left({ }_{36}^{92} \mathrm{Kr}...
Study smarter with the SolutionInn App