Category: Writing

Louie is a self-employed taxpayer and also an investor in
the stock market in his spare time. In the current year, Louie incurs $2,500 of
travel expenses and $1,000 in registration fees related ro attending investment
seminars. Can Louie deduct the expenses for attending an investment seminar?

Latoya is an independent contractor and operates her own
successful consulting business in Milwaukee. She has just signed a large
contract with a new client chat will require her to spend nine months in
Cincinnati. Latoya leaves her husband and children in Milwaukee and incurs the
following expenses in connection with the tempo – rary assignment:
a. Which (if any) of these items can Latoya deduct in 2019?
b. Would your answer to Part a change if Latoya, after
completing the nine month assignment, needed to spend an additional six months
in Cincinnati?

In each of the following cases involving travel expenses,
indicate how each item is reported on the taxpayer’s tax return for 2019.
Include any limitations that might affect its deductibility.
a. Marilyn lives in Houston and owns several rental
properties in Denver. To supervise the management of these properties, Marilyn
incurs travel expenses including airfare, lodging, and meals while traveling to
and from the location of the rental properties.
b. Marc is an employee who incurs travel expenses as a
salesperson. The expenses are fully reimbursed by his employer after an
adequate accounting has been made.
c. Assume the same facts as in Parr b, except that the
expenses are not reimbursed.
d. Kay is a self-employed attorney who incurs travel
expenses (including meals) ro prepare a court case in a nearby city where she
spends the night.

1.Why is it important to distinguish whether an individual
is an employee or an independent contractor (self-employed)?
2.Deductions for individual taxpayers are classified as
either for AGl or from AGL Discuss the two categories of for AGI deductions.
3. Kelly is self-employed and incurs $2,200 of business meal
expenses in connection with business travel. $500 of the business meal costs
are consid – ered to be lavish or extravagant. How much can Kelly deduct in
2019?

Three years ago, Paul Wilde exercised all his stock options
in the start up company he helped establish and wa lked away with over $100
million. Since that time, he has spent all his energy, time, and effort in
managing his portfolio. His investment philosophy is one of steady, careful
investment in a well-balanced portfo lio. Thus, although each year he engages
in several sales and purchases, he genera lly buys and holds the securities for
both the dividends and the growth potential. Consequently, most of the stock
sales he makes are of securities he has held for over one year. Because his
investment activities have grown so large, this year he rented a suite of
offices and hired two investment advisors and five secretaries to help him. He
also purchased several new computers and some new office furniture for the
office. Paul has now come to you for some tax help. Specifically, he would like
to know if his activities are considered a business or an investment activity.
In your explanation, please include whether the expenses incurred in the
activity are deductions for or from AGL A partial list of research sources is
as follows:
• Higgins v. CIR, 25 AITR 1160, 41-1 USTC §9233 (USSC, 1941)
• Estate of Louis Yaeger, Deceased, Judith Winters, Ralph
Meisels, Abraham). Weber and the Bank of New York, 889 F2d 29, 89-2 USTC
‘l(9633 (CA-2)
• Frederick Mayer and Jan Perry Mayer, 67 TCM 2949 (1994)
• Rudolph W. and Abbie A. Steffler, 69 TCM 2940 (1995)
• Sec. 179