In this paper of Financial Accounting, you are required to find information on topic from text and use other sources for additional research purpose. You must determine the potential solutions to the issue and provide the basis for your solution. Finally, present the most appropriate solution and document your conclusion.

ACC4407  Financial Accounting                                                                              FALL,2014

TAXATION                         INSTRUCTIONS FOR RESEARCHPROJECT

1. Find information   on topic  from  text  as much as possible.
2. Use other sources for  additional   research: Internal  Revenue Code and Regulations Court  cases

Articles  or other  publications   on topic

Be sure to properly   cite your  sources from  your  (Google)  searches

1. Based on your  research,  determine   any and all potential   answers  to the  issue.

1. Be sure to provide  the  basis for your  solution

1. Present the  best solution   based on your  research.  Document  your  conclusion

FORMAT

You are to  present  your  solution  to the  class as if it were  a client  to whom  you were  presenting  the

results  of your  research.   Use Power  Point or other  appropriate   presentation    media.  Hand in a hard copy of your  slides and cites before  your  presentation.

First,  present  the  problem,  all potential   solutions  and your  recommended   solution   based on your research.   The presentation   should  take  eight  to ten  minutes.

The grade  will  be based on the  quality  of your  research,  the quality  of your  presentation    (do not  read from  the  screen or papers although   notes  are helpful).

3.

Ruby  incurred  substantial  medical  expenses  ($32,000)  and real estate taxes on her residence ($8,000).  Because she did not have the funds to pay these expenses,  she asked her mother,  Susan, to help her out. Susan made  the payments  directly to Ruby’s  creditors.

On her 2012 Federal  income  tax return,  Ruby deducted  $24,500  ($32,000-  7.5% of$ 100,000

AGI) of medical  expenses  and $8,000  of real estate taxes.  The IRS disallowed  these itemized deductions  on Ruby’s tax return.  According  to its position,  because  Ruby did not actually  pay these expenses,  she is not entitled  to any deductions.

Evaluate  the positions  taken by Ruby and by the IRS.