Please prepare a separate internal research memo for each client inquiry. In general, the memos should document the analysis you performed and conclusions of your research. More specifically, the memos should reflect the following about each client?s inquiry:

• Relevant facts
• Issues (questions) identified from the facts
• Applicable primary authority
• Conclusions and recommendations reached as a consequence of your research
• Analysis performed (i.e., how the primary authority cited above addresses the issues)

Tax\tResearch\tProject\t|\tTAX\t4001\t|\tSpring\t2017 Fact\tPattern\t- South\tFlorida\tCPAs,\tLLP\tis\ta\tboutique\taccounting\tfirm\tin\tTampa,\tFL.\tYou\tare\tcurrently\temployed\tas\ta\ttax consultant\tat\tSouth\tFlorida\tCPAs\tand\thave\tmany\tintriguing\tclients\twith\tdynamic\tand\t(sometimes)\tbizarre circumstances.\tAs\tthe\ttax\tfiling\tdeadline\tis\trapidly\tapproaching,\tyou\treceive\tseveral\tphone\tcalls\tfrom clients\tinquiring\tabout\tthe\ttax\tconsequences\tof\trecent\ttransactions\tand\tevents.\tThe\tsecond\tpage\tof\tthis document\tcontains\ta\tsummary\tof\tthese\tphone\tcalls. Deliverables\t- Please\tprepare\ta\tseparate\tinternal\tresearch\tmemo\tfor\teach\tclient\tinquiry.\tIn\tgeneral,\tthe\tmemos\tshould document\tthe\tanalysis\tyou\tperformed\tand\tconclusions\tof\tyour\tresearch.\tMore\tspecifically,\tthe\tmemos should\treflect\tthe\tfollowing\tabout\teach\tclient's\tinquiry: Relevant\tfacts Issues\t(questions)\tidentified\tfrom\tthe\tfacts Applicable\tprimary\tauthority Conclusions\tand\trecommendations\treached\tas\ta\tconsequence\tof\tyour\tresearch Analysis\tperformed\t(i.e.,\thow\tthe\tprimary\tauthority\tcited\tabove\taddresses\tthe\tissues) You\tmay\tuse\tthe\ttemplate\tfound\ton\tpage\t2-20\tof\tyour\ttextbook\tto\tguide\tyou\tin\tdrafting\tyour\tmemo. Please\tattach\tcopies\tand/or\tscreenshots\tof\tall\tprimary\tresources\tused\tin\tformulating\tyour\tconclusions\tto your\tdeliverable. Other\tItems\t- Work\twill\tbe\tperformed\tin\tself-selected\tteams\tof\tthree\tstudents.\tYou\twill\tindicate\tyour\tselected\tgroup\tin a\tcollaborative\tspreadsheet\tposted\ton\tCanvas. Deliverables\twill\tbe\tevaluated\ton\tcompletion\tand\tadherence\tto\tthe\tinstructions\tabove,\tbut\tI\tdo\texpect\ta bona\tfide\tattempt.\tPlease\tmake\tevery\teffort\tto\tensure\tthat\tyour\tsubmission\treflects\ta\tprofessional document\tthat\tyou\twould\tbe\tcomfortable\tsending\tto\ta\tclient\twho\thas\tpaid\tsubstantial\tfees\tto\thave\tyou perform\tthis\twork.\tYou\twill\tselect\tone\tteam\tmember\tto\tupload\tyour\tmemos\tto\tCanvas. Fact\tPattern,\tcont'd\t- 1) Ally\tis\ta\tgraduate\taccounting\tstudent\tat\tthe\tlocal\tuniversity.\tShe\tis\ta\trecipient\tof\ta\t$1,000\tscholarship from\tthe\tuniversity.\tIn\taddition,\tAlly\tworks\tas\ta\tpart-time\tteaching\tassistant\tin\tthe\tschool\tof accountancy.\tShe\tis\tpaid\t$7,000\tper\tcalendar\tyear\tand\treceives\ta\ttuition\twaiver\tcovering\t100 percent\tof\ther\ttuition.\tIf\tnot\tfor\tthe\twaiver,\tAlly\twould\thave\tpaid\t$8,000\tfor\ttuition.\tFurther,\tshe paid\t$400\tfor\tbooks\tand\tsupplies\trelated\tto\ther\tcoursework\tand\tincurred\tliving\texpenses\tof\t$6,200. Determine\thow\tmuch\tgross\tincome\tAlly\tmust\treport. 2) Benjamin\thas\ta\t\"friend\"\twho\tstole\t$218,000\tfrom\this\temployer\tthis\tyear.\tThis\tindividual\thas\tnot been\tsuspected\tby\tthe\temployer,\tthough\ta\tformal\tinvestigation\tbeen\tlaunched\tto\tidentify\tthe perpetrator\tof\tthe\tfraudulent\tactivity.\tMust\tthe\tstolen\tfunds\tbe\tincluded\tin\tgross\tincome? 3) Candace\tfound\t$13,100\tin\tcash\tinside\tthe\tspare\ttire\tcompartment\tof\ta\tused\tcar\tshe\tpurchased\tat\tan auction\tin\tDecember\tof\tlast\tyear.\tShe\tdid\tnot\tdiscover\tthe\tmoney\tuntil\tafter\tthe\tbeginning\tof\tthe new\tyear.\tThe\tauctioneer\thas\tnot\tasked\tabout\tthe\tvehicle,\tnor\thas\tanyone\telse\tstepped\tforward\tto claim\tthe\tmoney.\tMust\tthe\tdiscovered\tcash\tbe\tincluded\tin\tgross\tincome?\tIf\tso,\tthen\tin\twhat\tyear must\tthe\tincome\tbe\trecognized? 4) Henry\twas\tinvolved\tin\ta\tmotorcycle\taccident\tlast\tyear\tin\twhich\the\tseverely\tinjured\this\tlegs.\tAs\tpart of\ta\tlong-term\trehabilitation\tprocess,\this\tphysician\tprescribes\ta\tdaily\troutine\tof\tswimming.\tBecause there\tis\tno\tpool\tnearby,\tHenry\tconsiders\teither\tbuilding\ta\tpool\tin\this\town\tback\tyard\tor\tpurchasing another\thome\twith\ta\tpool.\tSoon\tthereafter\the\tfinds\ta\tnew\thome\twith\ta\tpool\tand\tpurchases\tit\tfor $175,000.\tHe\tthen\tobtains\tsome\testimates\tand\tfinds\tthat\tit\twould\tcost\tapproximately\t$20,000\tto replace\tthe\tpool\tin\tthe\thome\the\thas\tjust\tpurchased.\tHe\talso\tobtains\tsome\treal\testate\tappraisals indicating\tthat\tthe\texisting\tpool\tincreases\tthe\tvalue\tof\tthe\thome\tby\t$8,000.\tDuring\tthe\tcurrent\tyear, Henry\texpends\t$500\tin\tmaintaining\tthe\tpool\tand\t$1,800\tin\tother\tmedical\texpenses.\tHenry's\tAGI\tis $60,000.\tWhat\tis\tthe\ttotal\tamount\tof\tmedical\texpenses\the\tmay\tclaim\tin\tthe\tcurrent\tyear? 5) Derek\tand\tEmily\thave\tdiscovered\tthat\tif\tthey\tget\tdivorced\tin\tDecember\tof\tthis\tyear,\tfile\tas\tsingle taxpayers,\tand\tthen\tsimply\tget\tremarried\tnext\tyear,\tthe\tarrangement\twould\tresult\tin\tsignificant\ttax savings.\tIs\tthis\ta\tpermissible\ttax\tplanning\tstrategy? 6) Fred\thas\tsupported\this\t21\tyear\told\tstepdaughter,\ther\t22\tyear\told\thusband,\tand\ttheir\t1\tyear\told\tchild since\this\twife's\tdeath\tthree\tyears\tago.\tFred\tpromised\this\tlate\twife\tthat\the\twould\tsupport\ther daughter\tfrom\ta\tformer\tmarriage\tand\ther\tdaughter's\thusband\tuntil\tthey\tboth\tfinished\tcollege.\tThey have\tno\tother\tincome.\tIs\tFred\tentitled\tto\ta\tdependency\texemption\tfor\tany\tof\tthe\tthree\tindividuals? 7) As\ta\tresult\tof\tan\tearthquake\tdamaging\ttheir\thome,\tthe\tGregory\tfamily\tmust\tstay\tin\ta\thotel\tfor\tthree weeks\twhile\ttheir\thome\tis\tbeing\trestored.\tThey\tpay\t$4,200\tfor\tthe\troom\tand\t$1,900\tfor\tmeals.\tTheir homeowner's\tpolicy\tpays\t$6,100\tto\treimburse\tthe\tGregory\tfamily\tfor\tthe\tlodging\tand\tmeals.\tThe family\testimates\tthat\tit\twould\tordinarily\tpay\tapproximately\t$1,300\tfor\tthree\tweeks\tof\tmeals.\tTo what\textent,\tif\tat\tall,\tis\tthe\treimbursement\tincludable\tin\tgross\tincome? 8) Kelsey\tcontributes\t$250\ttowards\ta\tcause\ton\ta\tcrowdfunding\tsite\tto\tsupport\tvictims\tof\ta\trecent hurricane.\tWhen\tthe\ttime\tcomes\tto\tfile\ther\ttaxes,\tshe\twonders\twhether\tthe\tcontribution\tis\ttaxable. Kelsey\talso\tcontemplates\twhether\tthe\tvictims\tof\tthe\thurricane\t(i.e.,\tthe\tultimate\trecipients\tof\tthe contributions)\twill\thave\tto\tpay\ttax\ton\tthe\tdistribution\tof\tthe\tfunds\tfrom\tthe\tcrowdfunding\teffort