Taxation of Professor Lazo Free Tour to Costa Rica Accounting Question

four accounting question, APA style, 2 page. each question separate with question.

Question 1:

Jerry, age 23, a full-time student and not disabled, lives with William and Sheila Carson. Jerry is William’s older brother. Jerry is single, a U.S. citizen, and does not provide more than one-half of his own support. William and Sheila are both 21 and file a joint return. Can William and Sheila claim a dependency exemption for Jerry as a qualifying child?Required: Go to the IRS website (https://www.irs.gov/) and review Publication 501. Write a letter to William and Sheila stating if they can claim Jerry as a qualifying child. (An example of a client letter is available at the website for this text.)

Question 2:

Jason and Mary Wells, friends of yours, were married on December 30, 2014. They know you are studying taxes and have come to you with a question concerning their filing status. Jason and Mary would each like to file single for tax year 2014. Jason has prepared their taxes both as single and married filing jointly, and he has realized that the couple will get a larger combined refund if they each file single. Jason argues “that it’s not as if we were married for very long in 2014.” What would you say to Jason and Mary?

Question 3:

Professor Vanessa Lazo received a free tour to Costa Rica in a drawing at a professional conference. Professor Lazo has asked for your help in determining whether the free tour that she received is taxable. She understands that prizes and awards are taxable income to the recipient, but she does not think the free tour qualifies as a prize or award and is, therefore, not taxable.Go to the IRS website (www.irs.gov) and locate Publication 525. Review the chapter on Other Income. Write a letter to Professor Vanessa Lazo stating whether the free tour is taxable. If it is taxable, be sure to include in your letter where the income must be reported and the dollar amount.

Question 4:

Able Corporation is a closely held company engaged in the manufacture and retail sales of automotive parts. Able maintains a qualified pension plan for its employees but has not offered nontaxable fringe benefits. You are a tax consultant for the company who has been asked to prepare suggestions for the adoption of an employee fringe benefit plan. Your discussions with the client’s chief financial officer reveal the following （Required: Prepare a client memo that recommends the adoption of an employee fringe benefit program. Your recommendations should discuss the pros and cons of different types of nontaxable fringe benefits.）:

1. Employees currently pay their own premiums for medical and health insurance.

2. No group term life insurance is provided.

3. The company owns a vacant building that could easily be converted to a parking garage.

4. Many of the employees purchase automobile parts from the company’s retail outlets and pay retail price.

5. The president of the corporation would like to provide a dependent care assistance program under Sec. 129 for its employees.

 

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