Questions on Tax Issues and Regulations

Questions on Tax Issues and Regulations

Question 6

A reportable transaction under 26 CFR 1.6011-4 fetches a segmented approach in its description. First, the title proceeds to define transactions by considering elements such as investment, plan, entity or possible arrangements as aspired by the taxpayers. A reportable transaction is further listed along perspectives such as listed, confidential and transaction with an attached contractual protection. Their implication as reportable transactions tends to comprise further elements, such as the attribution of possible relief prospects while defining the expected obligations of the taxpayers. Do you need urgent assignment help ? Get in touch with us at eminencepapers.com.

Question 7

26 U.S. Code § 121 covers the exclusions associated with the tax obligations following the disposal of a residential property. Their implementation tends to differ by the expectations of the involved state and the subsequent value generated from property disposal. Under the current case, the implication of the anticipated sale would tend to define along expectations such as the ownership of the property and the period of residency shared by the seller — however, the implication of the suggested loss points on a potential trigger of a Section 1234 loss in relation to the expectation of the property. There arises a need for the Central Michigan Medical Association to consider opting out of the anticipated compensation and allow the transaction to benefit from the provision of Section 1234 loss. Also, the decision would involve appreciating the potential representation defined by the taxpayer in their obligation.

Question 8

The top ten federal tax expenditures include:

1. Credit on the earned income
2. Mortgage interest deductions
3. Exclusions for pension in both earned and paid prospects
4. Reliefs for capital gains under long-term models and dividends
5. Mitigations of the state and other local taxes
6. Credit on child tax
7. Reliefs associated with capital gains upon the death of the involved
8. Reliefs are attached to contributions made by employees on aspects such as healthcare and related premiums, especially for insurance.
9. Reliefs for benefits stemming from medical processes.
10. Reliefs for contributions in charitable models and social activities.

Question 9

The debt engaged to the roommate may not qualify as a taxable element due to the limitations in filing it under canceled or forfeited status. From the sent email, the debt experienced a delay situation and not a prospect of transforming into bad debt.

Question 10

26 U.S. Code § 162 seeks to examine expenses associated with trade or business activity. Section (a)(2) focuses on the inclusion of deduction associated with the business or trade travels. However, the section insists on the engaged travels to involve a location away from home as further reinstated in (a)(3).

Question 11

26 U.S. Code § 6662 seeks to regulate the prospect of engaging in deliberate underpayments by the taxpayers. Section (b) (2) reflects on the underpayment resulting from misrepresentation of income tax through understating — apparently, the capturing of the income tax understating manifests in section (d), where there is a detailed reflection of aspects such as the depth of income tax understating among others.

Question 16

The case of Sally falls under professional gains and tax obligations as stipulated by Publication 970. Participation in education programs warrants the consideration of potential ground for the requesting tax reliefs. In the case of Sally, the notion of participating in higher education to further career objectives allows the enjoyment of the associated tax reliefs by Publication 970.

Question 17

26 U.S. Code § 882 allows the introduction of treasury regulations on foreign firms that have their operations within the United States. Ideally, the regulation allows for the description of the applicable taxation model for such firms. Adherence to the suggested taxation models deploys the input of Form 5472 by the IRS in presenting their annual filings.

Question 19

Mattes v. Commissioner (1981) lists among the tax court decisions seeking to determine the potential of claiming medical deductibles from expenses associated with a hair transplant. A reflection of a similar decision from a current court would tend to adhere to the findings of the 1981 Tax Court since hair transplant does not amount to potential medical needs. Instead, parties interested in seeking hair transplants tend to have a cosmetic inclination over a medical interest. As a result, a contemporary tax court would still refrain from allowing their inclusion in medical tax deductions.

Question 20

The tax concern in Direct Marketing Association v. Brohl (2015) comprised of an accusation for violation of federal tax regulation by traders that failed to participate in the collection of sales tax; or subsequent notification of the clients of their lack of collecting the suggested revenues.

Citation for the Supreme Court decision

Direct Marketing Ass’n v. Brohl, 575 U.S. ___ (2015)

Citations for the Circuit Court decision in 2016

Direct Marketing Association v. Brohl, No. 12-1175 (10th Cir. 2016)

Question 22

Revenue Rulings 2016-15 was issued in June 2016 and sought to address concerns expressed towards attributes such as real properties qualified under indebtedness. There was a provision for the targeted property having usage interests in business or trade-related activities. The 26 U.S. Code § 108, focusing on the discharge of indebtedness through generated income, received substantial reflection, especially clauses (c)(3)(A).

Revenue Rulings 2017-2 was issued in January 2017 and sought to evaluate the provisions availed for income tax. As a result, the rule sought to address numerous laws including 26 U.S. Code § 1274(d), 26 U.S. Code § 1288(b), 26 U.S. Code § 382(f), 26 U.S. Code § 42(b)(1) and (2), 26 U.S. Code § 7520 and 26 U.S. Code § 642(c)(5).

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Questions on Tax Issues and Regulations

Chapter 7

6. Under Treas. Reg. §1.6011-4, how is a reportable transaction described?

7. Central Michigan Medical Association (CMMA) is planning on hiring a new cardiologist who currently lives in Dallas, Texas. The cardiologist owns a home in Dallas. Due to the depressed housing market, he would incur a loss of $80,000 if it were sold. For the new doctor to relocate to Michigan, he requests that CMMA reimburse him for the loss to be incurred on the sale of his Dallas home. In conducting tax research, what are some tax issues to consider regarding the tax treatment for the loss reimbursement? Identify the key issues as precisely as possible.

8.  Research what the top ten major federal tax expenditures are. Hint: For 2016, you can go to the Taxpayer Advocate Service Annual Report to Congress and find a table with the estimated cost of providing that tax benefit.

9. You loaned your roommate $4,500 for next semester’s tuition. Your roommate promised to pay you back next summer from his summer employment. However, the next summer, you realize that your roommate never found a job but vacationed all summer in Europe. He e-mails you and informs you of his inability to pay off his debt. Can you claim any tax deduction? Focus primarily on the Internal Revenue Code for your research.

10. What deduction does Section 162(a)(2) specifically authorize? What Code provision in another section disallows some of those deductions? Explain.

11. What is the penalty provided under Code Section 6662(b)(2)? Where in that Code section is that penalty defined? Explain the definition in your own words.

16. Assume Sally is a professor who has a PhD in accounting and teaches tax courses. She decided that it would help her to earn a law degree with a heavy emphasis on tax classes. Can she deduct the cost of the tax courses offered as part of her law degree? Explain and cite specific provisions in the Code and Treasury Regulations.

17. Which Treasury Regulation provides rules for foreign-owned U.S. corporations and foreign corporations engaged in a trade or business within the United States (reporting corporations)? What IRS form is a reporting corporation required to file that relates to reportable transactions with a related party?

19. Find and read a Tax Court regular decision that discusses whether hair transplants are deductible medical expenses. Give the official citation to the case. What did the Tax Court hold? If a case with similar facts were decided today, would the Tax Court reach a similar conclusion? Explain.

20. Summarize what tax was at issue in the Direct Marketing Association case mentioned in this chapter. Explain what happened on its appeal to the Supreme Court. Provide a proper citation, including both the Supreme Court’s decision and the 2016 decision in the Tenth Circuit Court of Appeals.

22. Locate Revenue Rulings 2016-15 and 2017-2, identify the topics, and find the dates of the Revenue Ruling. What are the applicable Code sections for each revenue ruling? Give the proper citations for these revenue rulings in the Internal Revenue Bulletin.