Q:
The most general end product of a research question is a research memo,
which has five basic parts: (1) facts, (2) issues, (3) authority list, (4) conclusion, and (5) analysis.
Part-1
The facts for the assignment are as given:
In 2009, Mr. Smith purchased a principal residence for $1,500,000. He made a down payment of $300,000 and financed the remainder by borrowing $1,200,000 through a loan secured by the residence. In 2009, Mr. Smith paid interest that accrued on the indebtedness through that year. He had no other debt secured by the residence. May he deduct the whole amount of interest which was paid on the home loan?
Part-2
The facts for this assignment are as given:
R.E.M., a calendar year corporation and Athens, Georgia, band recently sold tickets ($20,000,000) for concerts scheduled in the United States for next year and the subsequent year. For financial statement purposes, R.E.M. will identify the income from the tickets when it performs the concerts. For tax purposes, it uses the accrual method and would prefer to defer the income from the ticket sales until it performs the concerts. This is the first time that it has sold tickets one or two years in advance. Michael Stipe has asked your advice.
Part-3
The facts for this assignment are as given:
Bob and Mary have been married for 25 years. They are both college professors. Mary (50 years of age) makes $65,000 yearly and Bob (60 years of age) makes $75,000 yearly. Their oldest daughter is getting married. Mary and Bob would like to either 1) take out a second mortgage on their home (they will get an interest rate of 7%) or 2) withdraw funds from their IRAs or 3) sell their rental property. The cost of the wedding is $35,000. The equity in their home is $150,000; they have $80,000 in IRAs between the two of them and the basis of the rental property is $20,000. The rental property will be sold for $120,000. Bob and Mary want to know how they should finance the wedding and if tax implications may be a factor.