Memorandum

Facts

Michael $($a regional manager at D&M Co$.)$ and Holly $($a part$-$time HR representative$)$ are

married and live in New Jersey with their son Dwight. Michael has cancer and his

physician, Dr$.$ Halpert, recommends Holly attend a conference at a renowned clinic in

Chicago, Illinois that teaches caregivers how to take better care of their loved ones with

the illness. Holly takes the physician$$s advice and flies to Chicago for the conference,

which is $5$ days. Holly incurs the following expenses and uses some of her savings and

inheritance to cover these costs: airfare $[$$$1,200],$ meals $[$$$75$ per day$],$ hotel $[$$$325$ per

day$],$ and fees to register for the conference $[$$$2,300].$ A prominent speaker at the

conference, Toby, encouraged caregivers to travel with their patients to warmer

climates where the change in scenery can improve their morale and overall well$-$being.

Both Holly and Michael have always wanted to visit the Caribbean and dream of

escaping to its beaches and pristine waters. Holly returns from the conference and

immediately schedules a three$-$month trip to the Cayman Islands for Michael and herself

to enjoy the warm weather and bask in the sunshine. A week into the trip $($unbeknownst

to Michael$),$ his father, Oscar, and good friends Daryl, Meredith and Jo arrive and stay

with the couple for a few weeks.

Moreover, Holly is way over due for a new vehicle $($her current car is $15$ years old$).$ She

has heard many great things about plug$-$in electric vehicles and is considering

purchasing one $($e$.$g$.,$ a Tesla$)$ rather than a standard car. She is wondering if there are

tax benefits to purchasing an electric vehicle and if there is any difference for tax

purposes between a brand new EV or a pre$-$owned EV$.$

Holly and Michael$$s adjusted gross income $($AGI$)$ is $$41,000.$ Although Michael and

Holly have in$-$depth knowledge about paper and office supplies, they are unfamiliar with

the tax implications of the above transactions and have asked for your help.