I need help with this project. Questions are attched.

PROJECT Refer to the \"Project Instructions\" document for detailed instructions of this project. It is important that you carefully read and follow directions so that you understand my expectation. Many points have been lost because students did not follow instructions. Treat the project as if you would submit it to your manager, or a Board member. If you need to make assumptions to better answer the question, state the assumption and then give your answer. If you need to make a calculation, please illustrate clearly. Make sure you fully explain your answer by citing to case, ruling, code, regulation, etc. Case #1 (20 Points) Both Larry and Wendy are calendar-year, cash method taxpayers. The lease requires an annual rental of $2,000, due in arrears (meaning at the end of the term) on December 31. (a) On December 31, 206, Wendy went to Larry's office with a check that Larry refused to accept, telling Wendy to mail it. She did, and he received the check on January 2, 2017. (b) Wendy telephoned Larry on December 31, 2016 and informed him that she had written the check, but could not get away from the ski lodge, and that he could pick it up if he desired. Larry did not pick up the check. Wendy mailed it on January 2, 2017 and Larry received it on January 5, 2017. Does it matter where Larry was, and when he received the telephone call? Required: Discuss the tax consequences to Larry and Wendy, of the above alternative rental payments. A partial list of recommended research sources is: The textbook - Constructive receipt Reg. 1.451-2(a) IRC 451 Davis v. Commissioner, 37 T.C.M 42 (1978) Reedy v. Commissioner, 42 T.C.M. 1401 (1981) IRC 162 Online resources 1 Case #2 (20 Points) a. How is the Internal Revenue Code organized? What is the organization scheme, i.e. how are the various divisions and subdivisions labeled? b. Regulations are issued under the authority of 7805(a). When discussing regulations for research purposes, we generally are concerned with one or more of the following three issues: (1) what is their weight of authority, i.e. value as precedent or otherwise, (2) can we take a position to the contrary and on what grounds. Research and answer the 2 aforementioned issues. A partial list of recommended research sources is: The textbook - Chapter 2 IRC 7805 Online resources Case #3 ( 20 Points) Patrick Reed (SSN 269-09-9092) operates the Reed company as a sole proprietorship. The company has the following depreciable property. The automobile is used 100% for business. Patrick has written evidence of the business use, which was 19,280 miles in 2016. He has another vehicle he uses for personal use. The table below provide detailed inforamtion about the assets he acquired. Date of Acquistion 1/30/2015 3/10/2016 8/6/2016 12/1/2014 Item Used car Garage for auto New Machine Used desk $ $ $ $ Cost 24,000 38,000 12,460 1,910 Additional information: Patrick took the bonus deprecication in the current year. For the used desk, Patrick used the midquarter convention when it was acquired in 2014. Required: a. Using the information, prepare and complete Patrick's 2016 Form 4562, Depreciation and Amortizaiton. Treat the return as if you were a tax professional and the return would be filed with the IRS. b. You must show your detailed work to support the numbers on the return in orde to get credit for this case. 2 Case #4 ( 20 Points) For several years, you have prepared the tax return for Alpha Corporation, a closely held corporation engaged in manufacturing garden tools. On February 20 of the current year, Bill Johnson, the president of Alpha Corporation, delivered to your office the files and information necessary for you to prepare Alpha's tax return for the immediately preceding tax year. Included in this information were the minutes of all meetings held by Alpha's Board of Directors during the year in question. Then on February 27, Bill stops by your office and hands you an \"addendum\" to the minutes of the director's meeting held December 15 of the tax year for which you are preparing the tax return. The addendum is dated the same day as the director's meeting, and authorizes a charitable contribution pledge of $20,000 to the local community college. With a wink and a big smile, Bill explains that the addendum had been misplaced. In reviewing the original minutes, you find no mention of a charitable contribution pledge. Required: What should you do? A partial list of recommended research sources is: The textbook Online resources Refer to the Statements on Standards for Tax Services linked in the SacCT course or you can find the standards from the AICPA website (The link is provided in SacCT) Case #5 (15 Points) Mark Hancock is a self-employed attorney who operates his law practice as an unincorporated sole proprietorship. In 2015, the IRS disallowed several business deductions he took in 2013 and 2014. In addition to paying the deficiency and assessed penalties, he also pays $18,000 in interest on the tax owed. Required: Can he deduct that interest in the current year? Explain. A partial list of recommended research sources is: The textbook Sec. 162, Sec. 163 Reg. Sec. 1.163-9T Kikalos v. Comm., 84 AFTR 2d 99-5933 Online resources 3 Case #6 (25) Lamba Corporation reports the following items for book and tax purposes in its first year of operations (year 1) Book Gross Receipts Minus COGS Gross profit from operations Plus Dividends from less than 20% owned corporations Tax Exempt Income Prepaid rental income Minus Operating expenses Depreciation Bad debt expense Business Interest Expense Insurance Premiums on life of key employee (Lamba is the beneficiary NOL disallowed for tax purposes Net Income before special deductions Taxble income before special deductions Additional Information Federal income tax expense per books Tax Difference 1,500,000 (550,000) 950,000 1,500,000 (550,000) 950,000 0.00 0.00 0.00 10,000 3,000 0.00 10000 0.00 8000 0.00 3,000 (8,000) (300,000) (60,000) (25,000) (75,000) (300,000) (170,000) (16,000) (75,000) 0.00 110,000 (9,000) 0.00 (2,800) (12,000) 488,200 0.00 0.00 (2,800) (12,000) 407,000 151,640 Required: a. b. c. d. Prepare the 2016 Schedule M-1 for Form 1120. Calculate Lamba's taxable income (the Schedule-1, line 10) Calculate Lamba's Federal tax liability (show your calculation). The tax table is in your textbook. Caculate Lamba's Federal effective tax rate. (show your calculation) 4 TAX PROJECT Due: April 24, 2017 on or before midnight Submit it online using the Project link from the menu in SacCT course A. Format Instructions: You should adhere to the following instructions to earn maximum points for your paper, or it would result in a grade deduction. 1. Your paper must have a cover page with the following: a. Mid Term b. Your Name c. ACCY 171 d. Due date (10/17/2016) e. Signed honor statement (see item B) 2. Word document is preferable format for research questions. 3. You should use a 12-point, Times New Roman or Aria font, and single-spaced unless otherwise noted. 4. Page numbers should be centered at the bottom of the page. 5. You should use the spell checker, and proof your final project. 6. All work must be neat, legible, and orderly and looks professional. 7. The paper should contain headings that correspond to the questions. 8. Responses to each new question should begin on a new page with appropriate headings. 9. The entire project must be submitted in ONE document. If you submit more than one document, I only grade the first one. 10. Research or supporting materials for each question should be organized in an orderly manner that makes it easy for me to find and grade your paper. If I cannot locate the supporting materials, you may lose points. B. Content Instructions: 11. All content should be original. Plagiarism is cheating. Whenever you use other writers' ideas, you must acknowledge your sources. If you are committing plagiarism, you will receive a zero for the project. 12. For research questions, you should type and answer all questions in a word document. You can use my recommendation or your own research. I recommend you to utilize the RIA research database in Sac State library. 13. For this project, research and external sources are required. You should do a thorough and professional job as though this was for your employer. You must cite all original sources used for your project unless it is your own opinion. You must include a reference list at the end of the paper. At least six meaningful and useful citations must be obtained and utilized. Sources should be listed in alphabetical order with complete and proper citation format using either MLA or APA style. 14. For tax return questions, go to the IRS website, download the 2016 forms, complete the tax forms by hand and scan them in for the project. Make sure your writing is legible. If I can't read your writing, you may not get points. Write the question number on the top of the tax form. Treat the return as if you would submit it to the IRS for your client. 15. If you need to make a calculation, please illustrate clearly to get credit. 16. If you need to make assumptions to better answer the question, state the assumption and then give your answer. Make sure you fully explain your answer by citing to case, ruling, code, regulation, etc. 17. It is the general expectation of the accounting profession and in this class that your work has to be prepared in a professional manner. Professionalism requires the proper use of English. Your paper should be at a college and professional level of writing. As in any college-level report, you should vary your sentence structure. There will be substantial point deduction for poor writing, incorrect grammar, bad format, or substandard quality of your submitted work. 18. The project grading is very strict. Your answer is also graded based on application of content taught in this course, depth and quality of analysis, organization, presentation, and written report. You should do a thorough and professional job as though this was for your employer. C. Signed Statement Copy and paste this honor statement to the front page of your paper. I am agreeing to abide by the University Honor Code. I understand that cheating is unethical. Therefore, I will not cheat, or use the work of others, including copy and paste sources on the internet as my own for this assignment without giving proper credit to the authors. _________________________________ Write your name If you submit your paper without the signed statement, it will not be graded and you will receive a zero for this paper. Tax Research Case Sample Three years ago, Paul Wilde exercised all his stock options in the start up company he helped establish and walked away with over $100 million. Since that time, he has spent all his energy, time, and effort in managing his portfolio. His investment philosophy is one of steady, careful investment in a well-balanced portfolio. Thus, although each year he engages in several sales and purchases, he generally buys and holds the securities for both the dividends and the growth potential. Consequently, most of the stock sales he makes are of securities he has held for over one year. Because his investment activities have grown so large, this year he rented a suite of offices and hired two investment advisors and five secretaries to help him. He also purchased several new computers and some new office furniture for the office. Paul has now come to you for some tax help. Specifically, he would like to know if his activities are considered a business or an investment activity. In your explanation, please include whether the expenses incurred in the activity are deductions for or from AGI. A partial list of research sources is as follows: Higgins v. CIR, 25 AFTR 1160, 41-1 USTC 9233 (USSC, 1941) Estate of Louis Yaeger, Deceased, Judith Winters, Ralph Meisels, Abraham J. Weber and the Bank of New York, 889 F2d 29, 89-2 USTC 9633 (CA-2) Frederick Mayer and Jan Perry Mayer, 67 TCM 2949 (1994) 2940 (1995) Sec. 179 Rudolph W. and Abbie A. Steffler, 69 TCM Solution: FACTS: 1. Paul Wilde owns a large portfolio of stocks and securities which he manages himself. 2. His investing philosophy is to purchase and hold stocks for the dividends and long-term growth. 3. Although he buys and sells stock regularly during the year, most of the stocks he sells have been held over one year. 4. This year he has rented a suite of offices and has hired two investment assistants and four secretaries. He has also purchased some new computer equipment and office furniture for the offices. ISSUES: 1. Do Paul's activities constitute a trade or business, or are they an investment activity? 2. What is the tax treatment of his expenses? Specifically, are they deductions \"for\" or \"from\" AGI? DISCUSSION: In Higgins v. CIR, 25 AFTR 1160, 41-1 USTC 9233 (USSC, 1941), the Supreme Court held that a taxpayer who merely kept records and collected interest and dividends from his securities was not involved in a trade or business. This was the case, despite the size of the taxpayer's holding. Subsequent cases also indicate that a taxpayer who buys and sells stocks and securities for the dividends and long-term growth and who is not involved in short-term trading is not engaged in a trade or business. See also Estate of Louis Yaeger, Deceased, Judith Winters, Ralph Meisels, Abraham J. Weber and the Bank of New York, 889 F2d 29, 89-2 USTC 9633 (CA-2), Frederick R. Mayer and Jan Perry Mayer, 67 TCM 2949 (1994), and Rudolph W. and Abbie A Steffler, 69 TCM 2940 (1995). In each of these cases, the taxpayer was more interested in the long-term investing potential rather than merely trading based upon short term market fluctuations. Furthermore, the taxpayers were not involved in selling stocks and securities to others in the capacity of a broker. Since Paul is deemed to be engaged in an investment activity rather than in a business, the expenses are deductions \"from\" AGI. Furthermore, they are deductible only to the extent that they exceed 2% of Paul's AGI. Since Paul is not considered engaged in a trade or business, Paul must capitalize and depreciate the computers and office equipment and cannot take a current section 179 deduction. CONCLUSIONS: 1. Paul's activities are not considered a business. Instead, Paul is involved in an investment activity. 2. The expenses are deductions \"from\" AGI. Additionally, they are deductible only to the extent they exceed two percent of Paul's AGI. 3. Paul cannot deduct the purchase of the computers and office furniture under Sec. 179 because they are not used in a business. Instead, they must be capitalized and depreciated