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Minsu Deductions Essay example

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Tax Memo to the File
May 8, 2013
From: Earnest J. Lumpkin III
Subject: Minsu Deductions
Facts: For the past two years, Minsu, a Korean American, has worked as a high school physical education teacher. He is also a body-builder and a part-time graduate student in educational technology at State University. In preparing for a master’s thesis he has decided to participate in Arnold’s World Body-building training program and analyzing advanced technology used to help students absorb physical education. Arnold’s training program has a regular faculty, curriculum, an enrolled body of students, and advanced technology in its gym equipment.
Minsu earned $4,000 during the fall 20X5 as a body-builder by coming in second in the state …show more content…

All of the training that was done, the mileage that he placed on his car for traveling to and from training and every other expense associated with his master thesis can be deducted.
Discussion of the Law: There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including—(1)a reasonable allowance for salaries or other compensation for personal services actually rendered;
(2) Traveling expenses (including amounts expended for meals and lodging other than amounts which are lavish or extravagant under the circumstances) while away from home in the pursuit of a trade or business; and
(3) Rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity. (26 U.S.C.A. § 162)

(ii) an educational organization which normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. 26 U.S.C.A. § 170
Application of the Law: The Supreme Court Gambles on the Definition of Trade or Business: Commissioner v. Groetzinger

Tax Memo to the File
May 8, 2013
From: Earnest J. Lumpkin III
Subject: Sylvia Deductions
Facts: Sylvia is a professor in business at the University

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