Embery MBAA667 Complete Course

suite of offices, hired three investment advisers, and 2 secretaries to help She also purchased
several assets for the office, such as a new computer and office furniture
Vivian is now seeking some tax help Using the following partial list of research sources explain
to Vivian if her activities are considered a business or an investment activity Please also, explain
if the activities are deductions for or from AGI
Higgins v CIR, 25 AFTR 1160, 41-1 USTC § 9233 (USSC, 1941)
Estate of Louis Yaeger, Deceased, Judith Winters, Ralph Meisels, Abraham J Weber and
the Bank of New York, 889 F2d 29, 89-2 USTC 9633(CA-2)
Fredrick Mayer and Jan Perry Mayer, 67 TCM 2949 (1994)
Rudolph W and Abbie A Steffler, 69 TCM 2940 (1995)
Sec, 179
Make sure to explain the logic behind your decision
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Shawn Bernoulli formed Bernoulli Air Corporation on January 3 and immediately made the S
election effective for year one Shawn contributed $50,000 in cash in exchange for 100% of
Bernoulli Air’s stock The corporation also obtained a bank loan for $75,000 to help finance
operations As is common with new businesses, Bernoulli Air had an ordinary loss of $60,000 in
year 1 and $12,000 ordinary loss for year 2 Additionally in year two, Shawn and his wife Jana
divorced and as part of the divorce settlement on March 31 of Year 2, Shawn gave Jana 50% of
the Bernoulli Air stock In the third year, business operations did much better The corporation
had earnings of $40,000 ordinary income
Using the following partial list of research sources, help Shawn determine the tax consequences
of these events, in particular, the usage of the S corporation losses
IRC Sec 1366