Eliisa just made partner at a local public accounting firm. She receives a salary of $90,000. She decides to purchase another home in Colorado that she will rent out via Airbnb when shes not there. She would like to spend the summers, & a few weeks in winter, in Colorado, but will stay in her condo in Portland the rest of the year. She will receive $250 per night from Airbnb when it is rented. She will also hire a cleaning company that will come after each guest. Some other expenses will include keeping supplies stocked (toilet paper, coffee, etc.), buying some additional supplies, such as a smart key lock, new sheets, a new coffee maker, blackout curtains, some additional maintenance that will be required due to having extra people in her place (painting touch-ups, special carpet cleaning, etc.), and there is also depreciation of this second home & its furnishings. She pays a mortgage on the house and annual property taxes. Depending on how this all works out, shes contemplating renting out her condo when shes in Colorado as well. Using the tax law, determine how these items will affect her taxes, and if you would recommend also renting out her condo or not. Do the research about that topic: Fats Issues Application law Analysis Conclusion NOTE: Primary sources include the internal revenue code ( IRC) revenue ruling and court cases. But not include anything from the IRS

Below is just an example of how the above scenario needs to be answered. You can just tell me about the applicable laws and how the different things need to be treated as per the given scenario.

Memorandum-to-the-File Re: The amount of gross income Ann must report

Facts: Ann, which is our client, is a graduate student at Portland State University and received a $1,000 scholarship from Portland State University. In addition, Ann works half-time as a teaching assistant in the Economics Department at Portland State University earning $47,000 annually and is equal to that of other paid part-time instructors. Her tuition is waived which would otherwise be an $8,000 cost. Ann paid $500 for books and supplies and had $7,400 of living expenses. Ann wants to know how much gross income to report.

Issues:The amount of gross income to be reported depends on three issues: first if any or all part of the scholarship amount should be reported; second, whether or not to include the amount of the tuition that has been waived in Anns gross income; third if the living expenses are allowed to be deducted.

Applicable Law Section: 117(a) explains that gross income does not include amounts received as a, qualified scholarship by an individual who is a candidate for a degree at an educational organization described in section 170(b)(1)(A)(ii). Section 117(b)(2)(B) states the allowable related expenses to the scholarship, Fees, books, supplies, and equipment required for courses of instruction at such an educational organization. Section 117(d) states that qualified tuition reduction shall not be included in gross income. Section 117(d)(5) describes the special rules for teaching and research assistants, it states that an individual who is a graduate student at an educational organization and who is engaged in teaching or research activities for such organization shall be applied as if it did not contain the phrase (below the graduate level). Section 262(a) tells us that no deduction shall be allowed for personal, living, or family expenses.

Analysis: Issue 1: Within the meaning of Sec. 117(A) and Sec. 117(b)(2)(B), gross income does not include the amount of qualified scholarships and only fees, books, and equipment required for the courses may be applied towards the scholarship. Ann incurred $500 of expenses that are applicable to the scholarship, and the rest of scholarship will have to be reported in her gross income. Issue 2: Sec. 117(d) and Sec. 117(d)(5) gives guidance on tuition reduction. Ann will not have to report the amount of the tuition that is being waived because she is a graduate student working as a teaching assistant in the Economic Department. The tuition reduction applies to graduate students who are engaged in teaching or research activities. Issue 3: Sec. 262(a) gives an explanation of what can be deducted in expenses. Anns $7,400 of personal expenses will not be deductible.

Conclusion: The amount of gross income that Ann will report is $47,500. This amount includes the following: $500 from the excess of the scholarship, and $47,000 of annual salary. Ann is not allowed to deduct any personal living expenses