accounting hw

1. Items to be located

Locate two primary items and one secondary item of authority (Internal Revenue Code, Treasury Regulations, Revenue Rulings, Revenue Procedures, cases, etc.). Review Chapter 2 for the sources clarification.

2. Assignments

(1) For each item located, turn in one paragraph summary of the item and one paragraph of how the item was located with one page attachment of each item located.

(2) Prepare a memo stating the facts and your conclusion and analysis.

(3) The summary and memo must be typed and printed on a word processor in your own words.

3. Points Available and Due Date Select one case below and a maximum of 10 points are available to the selected case. Turn in assignment on time according to the syllabus.

Problem # 1

Mr. Swing was born with the “gift of dance.” As a result, he has always earned his living by being a dance instructor. In recent years Mr. Swing has been experiencing a significant decline in income, which he attributes to his advancing age. Potential clients simply prefer the younger instructors. As a means of bolstering his sagging income, Mr. Swing decided to invest in a hair transplant. In 2019, he paid a local dermatologist a total of $25,000 to transplant enough hair to remove the bald spot on the top of his head. The procedure called for a series of transplants of tiny plugs of tissue including the skin and subcutaneous layers. After the transplant, his work level picked up. He is asking if he can deduct the transplant as a business expense. Would it be deductible

elsewhere?

Problem # 2

Gayle Smart, a single woman, is employed in a big city as a CPA. Due to her work and her

commuting, she is away from home a total of 13 hours each week-day. Although Gayle never

works on weekends, her 65 hours per week schedule continues year-round. Most of the year

Gayle relies on the Whoopee Day Care Center to provide care for her 11-year-old dependent son, Josh. The cost of these services exclusive of the schooling provided is $100 per week.

During the summer, when Whoopee is not in operation, it is difficult for Gayle to locate proper care for Josh. As a result, in 2019 Gayle sent Josh to summer camp in Canada for eight weeks. The $2,400 cost was for meals, lodging, and a fee for all activities, which included instruction in a number of outdoor sports. The only other cost incurred was round-trip airfare in the amount of $2,000. Gayle thought this was a real bargain since alternative care would not have to be sought during this period and yet Josh would be safe and well cared for. On her 2019 income tax return form 1040 Gayle included the total cost of the summer camp (including transportation) in arriving at her total qualified expenses to determine her dependent care credit for the year. Are these costs proper subjects for the credit?