The purpose of this assignment is to analyze and determine proper tax treatment associated with transactions. You will apply what you have learned in past principles of practice by completing one of the following options. The instructor will assign you a scenario that includes a corporation’s pertinent tax circumstance.
Using your corporation’s information and what you have learned in this course, develop a memo to your client using the outline presented. The memo should be 500-750 words and must include the following information:
- Explanation of the taxpayer’s business and issue at hand (heading: Facts).
- Conclusion as to the recommendations to the company (heading: Conclusion).
- Explanation of the IRS rules regarding the matter (heading: Analysis).
- Tax laws and applicable court cases to support the deductions, where applicable (included under the heading: Analysis).
The organization of the memo should present the headings in the following order: Facts, Conclusion, Analysis. The response should be formatted as a professional business memo to the client. The memo can and should include any speculations of professional judgement to supplement the facts and conclusion(s). The research should follow applicable tax research methodologies and frameworks in applying the client scenario to the tax law and its implications to the financial position of the company.
Save your assignment as a Word document with the filename: LastnameFirstInitial.ACC460.M.docx, where the M refers to Memo.
The Morris Corporation is a very successful and profitable manufacturing corporation. The corporation just completed leasehold improvements of its corporate offices, primarily for its top executives. The president and founder of the corporation, Mr. Timothy Couch, is an avid collector of artwork and has instructed that the lobby and selected offices be decorated with rare collections of art. These expensive works of art were purchased by the corporation in accordance with Couch’s directives. Couch justified the purchase of these works of art on the premise that:
- They are excellent investments and should increase in value in the future.
- They provide an appropriate and impressive atmosphere when current and prospective customers visit the corporation’s offices.
- The artwork is depreciable property and the corporation will be able to take sizable write-offs against income.
The financial vice-president of the corporation has requested your advice as to the depreciability of the leasehold improvements and the art. Prepare a research memorandum for the financial vice-president on these issues. Include a discussion on the different depreciation methods permitted and the availability of those methods of depreciation for both the leasehold improvements and the art.
A partial list of research sources includes:
- Sections 167, 168, and 179
- Rul. 68-232, 1968-1 C.B. 70
- Shauan C. Clinger, 60 T.C.M. 598 (1990)
- Simmon v. Comr., 103 T.C. 247 (1994), aff’d 95-2 USTC ¶ 50,552 (2nd Cir. 1995) nonacq. 1996-2 C.B.I
- Liddle v. Corm., 103 T.C. 285 (1994), aff’d, 95-2 USTC ¶ 50,488 (3rd 1995)
While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines, which can be found in the APA Style Guide, located in the Student Success Center.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to LopesWrite. A link to the LopesWrite technical support articles is located in Class Resources if you need assistance.
This benchmark assignment assesses the following programmatic competencies:
BS – Accounting – Public Accounting
5.5: Select specialized accounting theories and apply them to specific business scenarios.