ASSIGNMENT 1 FIT

Instructions

Sample Research Memo

Facts:   Discuss facts relevant to the question presented—that is, facts that provide necessary background of the transaction (generally, who, what, when, where, and how much) and those facts that may influence the research answer. Keeping the fact discussion relatively brief will focus the reader's attention on the relevant characteristics of the transaction.

Issues: State the specific issues that the memo addresses. This section confirms that you understand the research question, reminds the reader of the question being analyzed, and allows future researchers to determine whether the analysis in the memo is relevant. Issues should be written as specifically as possible and be limited to one or two sentences per issue.

Authorities: In this section, the researcher cites the relevant tax authorities that apply to the issue, such as the IRC, court cases, and revenue rulings. How many authorities should you cite? Enough to provide a clear understanding of the issue and interpretation of the law. Remember, in order to reach an accurate assessment of the strength of your conclusion, you should consider authorities that may support your desired conclusion, as well as those that may go against it.

Conclusion: There should be one conclusion per issue. Each conclusion should answer the question as briefly as possible, and preferably indicate why the answer is what it is.

Analysis: The goal of the analysis is for the researcher to provide the reader a clear understanding of the area of law and specific authorities that apply. Typically, an analysis will be organized to discuss the general area(s) of law first (the code section) and then the specific authorities (court cases, revenue rulings) that apply to the research question. How many authorities should you discuss? As many as necessary to provide the reader an understanding of the issue and relevant authorities. After you discuss the relevant authorities, apply the authorities to your client's transaction and explain how the authorities result in your conclusion.

Questions

Please provide the complete Internal Revenue Code in response to the following fact patterns (don't just Google the answer):

1. 1. A client comes to your office to complete her Federal income tax return.  She provides you her W-2 statements.  When asked whether she received any cash or income during the year, she tells you that she inherited $100,000 cash from her deceased uncle who died during the tax year.  The money was granted to her through her uncle's will.  The money was in her uncle's saving account at the time of his death and it was not derived from income producing property.  She wonders whether the $100,000 should be counted as income or not.  Is the client expected to report the $100,000 cash as income?  Regardless of your answer, please cite the complete Internal Revenue Code statute that supports your response.