Please make sure to cite and quote from the IRC and treasury regulations.

1. Sarah is an independent long-haul trucker. She operates her trucking business as a sole proprietor. While transporting a customer's inventory across country, she received a speeding ticket for driving 10mph over the posted speed limit for tucks on a federal highway. She paid the full fine of $500. She knows that if the $500 is deductible it will reduce the amount of net business income included in her gross income. However, she is not sure whether it is deductible, so she has contacted you. Is Sarah able to deduct the $500 speeding ticket as a business expense of her sole proprietorship? Cite your answer. Sarah can deduct the $500 speeding ticket as a business expense of her sole proprietorship. According to section 162 of the Internal Revenue Code, 2. Elliot is the one-year-old son of Andrew and Diana Wilson. Ellot starred in several television commercials this year for which he was paid $30,000 as compensation. His parents received the compensation on Elliot's behalf since he is only one-year-old. Andrew and Diana used $5,000 of Ellot's compensation to purchase special costumes that Elliot was required to wear for the commercials. Andrew and Diana Wilson contact you to determine how these items should be reported. Specifically: a. Who includes the $30,000 of compensation in gross income? Andrew and Diana or Elliot? Cite your answer. b. Who deducts the $5,000 paid for the required costumes as a business expense for AGI? Andrew and Diana or Elliot? Cite your answer. 3. Kim Green is a minister at a local church. He earns an annual salary of $50,000. His church also pays him an additional $25,000 rental allowance as part of his compensation package. Kim used the $25,000 to pay; (1) the annual rent on his home of $14,000 (fair rental value of his home is $18,000 ); (2) $4,000 of the food he consumed in his home during the year, and (3) the annual rent of $7,000 for a farm located next to his home. He uses the farmland to grow crops which he sells to local grocers during the year. Kim knows his annual salary of $50,000 is included in his gross income but contacts you to determine what amount, if any, of the additional allowance of $25,000 is included in his gross income. Specifically! a. What portion, if any, of the rental allowance used to pay the rent on his home (i.e.,$14,000) is included in Kim's gross income? Cite your answer. b. What portion, if any, of the rental allowance used to pay for food he consumed in his home (i.e.,$4,000) is included in his gross income? Cite your answer. c. What portion, if any, of the rental allowance used to pay the rent for the farm located next to his home (i.e., $7.000 ) is included in his gross income? Cite your