In order to determine how Helen is taxed during year three, two items must be discussed:
1. Helen’s gross income for the year
2. Helen’s enrollment as a full-time student in the UMD MBA program.
Gross income, defined in IRC §61(a)(1), states that gross income means all income from whatever source derived including compensation for services. Therefore, Helen’s compensation as an assistant manager for Bank of America causes her to have gross income of $40,000.
Since Helen was enrolled as a full-time student in an MBA program, we must research her options to deduct the tuition expense as a miscellaneous itemized deduction on Schedule A or receive the Lifetime Learning Credit.
Treasury Regulation 1.162-5 states that expenses made by an individual for education are deductible as ordinary and necessary business expenses if the education maintains or improves skills required in the individuals trade or business and does not satisfy minimum education requirements or qualify the individual for a new trade or business. Revenue Ruling 1968-591 states that individuals may still deduct expenses if they leave their trade or business for a year or less.
IRC §25A(c) describes the Lifetime Learning Credit. The Lifetime Learning Credit states that a taxpayer may deduct 20% of their qualified education expenses (tuition and related fees) up to a $2000 maximum. The education must be taken to acquire or improve a taxpayer’s job skills.
Based on my interpretation of the law, the ability of Helen to deduct her MBA tuition as a miscellaneous itemized deduction subject to the 2% floor on Schedule A of her tax return or receive the Lifetime Learning Credit depends on her job skills before and after the education. Based on t...
... middle of paper ...
...0 states that expenses for home improvements are not deductible, but add to the basis of the home which will change the gain or loss recognized when the house is sold.
C. The tax treatment for Zorro depends on whether he itemized the medical expenses he incurred. According to IRS Publication 4345, if a taxpayer receives a settlement due to physical injuries and did not take an itemized deduction for the medical expenses than the settlement in nontaxable. However, if the taxpayer took the itemized deductions for the medical expenses then the taxpayer must include the portion of income that provides a tax benefit.
D. The tax treatment for the discharge of the debt in exchange for the baseball collection depends on the fair value of the collection. If the fair market value of the collection is less than the $1,000 then the difference is deemed as gross income to Zorro.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Helen Keller was born on 27 June 1880 in Tuscumbia, a small town in Alabama, USA. Her father was a retired Confederate army captain and editor of the local newspaper; and her mother was an educated young woman from Memphis. When Helen Keller was 19 months old, she was afflicted by an unknown illness, which was possibly scarlet fever or meningitis which made her blind. Helen Keller was a symbol of courage and hope for all people, with the help of her teachers Anne Sullivan and Polly Thompson she showed people a way to see the light even in darkness.... [tags: Helen Keller, Radcliffe College]
1146 words (3.3 pages)
- Helen Keller was born Helen Adams Keller on June 27, 1980 in Tuscumbia, Alabama. Her parents’ names were Arthur H. Keller and Katherine Adams Keller; she was the first of two daughters that the couple had. Helen’s family wasn’t from the wealthy class, but earned most of their profits from their cotton plantation that they owned. Helen was born a healthy baby at first being able to see, hear, and even speak by the time she was six months old. Later on in 1882, she got sick which left her blind, death, and mute (biography.com).... [tags: Helen Keller, Anne Sullivan Macy]
1029 words (2.9 pages)
- Have you ever considered being blind, and deaf for your whole life. Sounds pretty inconceivable right. As for Helen Keller this was just an everyday battle that she had to face. During a very unexpected time when Helen was little, Helen and her family had to undergo some serious changes. Helen and her family adjusted to these new and undesirable changes in several different ways. Such as Helen having a private tutor, or Helen learning how to read and write. Helen Keller was an inspiration to the world inspiring many people around her by all of the great achievements despite all of her disabilities.... [tags: Helen Keller, Alexander Graham Bell]
835 words (2.4 pages)
- The Life and Accomplishments of Helen Keller What does living a life with hearing and vision loss entail. In the 1800's many deaf children were seen as an embarrassment and disposition for their families, but in 1880 a child was born that would change the depiction of impaired children forever. On June 27, 1880 Helen Keller, a perfectly healthy child was born into a wealthy family. Unfortunately, 19 months later she fell incredibly ill resulting in the loss of both her sight and hearing. Due to her inability to effectively communicate as a child she soon began to act out in extreme manners.... [tags: Helen Keller, Alexander Graham Bell, Blindness]
719 words (2.1 pages)
- A capital asset is almost anything that and individual owns for personal, pleasure, or investment use. Explained in How Are Capital Gains Taxed, “capital gains or losses are from stocks, a business, parcel of land, art, etc.” When an asset sells, either a gain or loss on the asset is assessed. To determine the amount of gain or loss, take the difference between the selling price of an asset minus the basis price for the amount of gain or loss. Capital gain is when the result is positive. When the result is negative, there is a capital loss.... [tags: Taxation, Taxation in the United States, Tax]
1856 words (5.3 pages)
- Helen Keller Imagine a life without being able to see or hear and not knowing how to communicate with anyone around you. That world of darkness is what Helen Keller lived in for six years. Helen Keller has been an inspiration to people ever since she turned six. From 1886-1960, she proved herself to be a creative and inspiring woman of America. She was a writer and lecturer who fought for the rights of disadvantaged people all over the world. Most importantly, she overcame her two most difficult obstacles, being blind and deaf.... [tags: Helen Keller Blind Mute Death Essays Bio]
1684 words (4.8 pages)
- Learning from Helen Keller Facilitated Communication Institute Helen Keller is probably the most universally recognized disabled person of the twentieth century. (Others such as Franklin Roosevelt were equally well-known, but Keller is remembered primarily for her accomplishments which are disability-related.) Those of us who have grown up in the last half of this century have only known Keller as a figure of veneration. We know her primarily through popularized versions of her life such as the play "The Miracle Worker," or through her autobiographical works such as The Story of My Life (Keller, 1961 ) and The World I Live In (Keller, 1908).... [tags: Helen Keller Deaf Blind Essays]
3874 words (11.1 pages)
- Ganymede and Helen “Ganymede and Helen,” a propagandistic text circa the 12th or 13th century puts two wonderfully beautiful specimens of the sexes in debate over love; love between a man and a woman, defended by Helen, and love between two men, fought for by Ganymede. Helen represents the orthodoxy while Ganymede provides the dissenting opinion; however, by the end, Helen is declared the winner and Ganymede asks for her hand in marriage. This turn is surprising, for moments before Ganymede is pro-man love and seems to act thus only because it is how society deems he should.... [tags: Ganymede Helen Love Homosexual Essays]
1826 words (5.2 pages)
- Helen Gardner In act one scene one we discover that Helen is a very down to earth type of person as she says “when I find somewhere for us to live I have to consider something far more important than your feelings. . . .The rent”, this shows that she is thinking about the more important things in life, she is also emphasising the letter “I” which is implying that she is a lot better than her daughter, this also shows that she has a roof over Jo’s head. The beginning of this play shows that Helen enjoys drink, “pass me a glass Jo” the first thing that she thinks about is alcohol, this shows that if she can afford to buy whisky then she may have been able to find a better place for them to li... [tags: Helen Gardner Essays]
2954 words (8.4 pages)
- Helen Stoner Helen Stoner is instantly stereotyped by readers as a judicious and unpretentious lady of high society England. Conan Doyle pulls the strings of the Victorian males desires and creates a 'damsel in distress', who comes to a man for aid that she does not have the resources to conclude herself. He portrays her as a woman who is wronged and in great danger therefore adding to the suspense of the story. Analysing the assortment of clothes that she is wearing the reader can conclude that she is of sufficient 'breeding' and discreet.... [tags: English Literature Helen Stoner Essays]
3662 words (10.5 pages)