Corporate Taxation - Assignment 2-3

Memo: Cynthia doubting doubting doubting doubting doubting Thomas 2008 appraise Return Audit conclusion for furrow Expenses on Personal Tax Return Ms. Cynthia Thomas is the President and fix sh areholder of over-embellished tum. Violet Corporation is a calendar socio-economic class taxpayer, who unfortunately over the last(prenominal) year has fall into a precarious financial position. Ms. Thomas incurred $9,500 of business expenditures for travel, entertainment, and promotional material on behalf of Violet Corporation. Ms. Thomas unyielding non to drag reimbursed for these write offs and instead decided to compute them on her own own(prenominal) tax return (1040). Ms. Thomas was unfortunately audited in 2008 by the Internal Revenue Service, and they be that these deductions were disallowed. Ms. Thomas requested to live on if the IRS is correct or if there is a way to bout the ruling. While these spendings are qualified under IRC 162, as it is an workaday and necessary expense that was paid or incurred during the taxable year in carrying on a trade or business. The unite States Supreme appeal held that to be engaged in a trade or business, the taxpayer must be involved in the activity with perseveration and regularity and that the taxpayers primary figure for engaging in the activity must be for income or profit; a sporadic activity, a hobby, or an entertainment does not qualify.

downstairs code 162 and the Supreme courts definition of an expense and a business, the expenses that Ms. Thomas incurred are deductible by the Violet Corporation. Because Ms. Thomas chose not to submit them for reimbursement, she is not eligible to deduct! them personally. In the eccentric of Robert O. and Rita R. Eder v. Commissioner, U.S. Tax Court, CCH Dec. 38,118(M), T.C. Memo. 38,118(M), 42 T.C.M. 585, T.C. Memo. 1981-408, (Aug. 6, 1981), the United States Tax Court effectuate that; The taxpayers were not required to incur trusted business expenses as a condition of their employment as corporate officers. This cutting directly relates to Ms. Thomas situation. Ms. Thomas, as a corporate...If you want to fail a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay