(1) What are the key facts in each of the 3 problems? (2) What is the general is
ID: 2328738 • Letter: #
Question
(1) What are the key facts in each of the 3 problems?
(2) What is the general issue to be addressed?
(3) What keywords would you use to research this question?
(4) Use online tax research tools to answer the question.
(5) What important information would you include in a memo/letter to the “client” to communicate the results of your research?
Please type your answers below. Be concise but thorough enough.
#2: Latrell recently used his Delta Skymiles to purchase a free roundtrip ticket to Milan, Italy (value $1,200). The frequent flyer miles used to purchase the ticket were generated from Latrell's business travel as a CPA. Latrell's employer paid for his business trips, and he was not taxed on the travel reimbursement.
How much income, if any, does Latrell have to recognize as a result of purchasing an airline ticket with Skymiles earned from business travel?
(1)
(2)
(3)
(4)
(5)
Explanation / Answer
Answer:
In the given case,
Latrell won't need to perceive any wage as for the buy of aircraft ticket with the utilization of skymiles earned from business travel. This is in accordance with IRS's Announcement 2002-18 that plainly expresses that any close to home utilization of miles or focuses earned through business travel or costs won't be dealt with as assessable wage/part (in the hands of the worker). This administer applies just to the degree that such miles/focuses are utilized for profiting benefits in kind (like aircraft ticket in the given case).
Answer for 2.
The issue to be tended to is that any utilization of preferred customer credits/remunerate focuses by any representative because of business travel for individual purposes will be accessable in the hands of worker or not.
Answer for 3.
The watchwords that I have used to examine this inquiry are given beneath:
1) Tax treatment of preferred customer credits
2) IRS rules for preferred customer credits compensate focuses
3) Tax treatment of miles earned from business travel
4) Use of preferred customer credits for individual utilize IRS
Answer for 4.
I have utilized "Google" web crawler and IRS site to discover the response to the inquiry.
Answer for 5.
The most critical data that I might want to incorporate into a notice/letter to the "customer" would be that a transformation of preferred customer credits/remunerate focuses into money will be dealt with as accessable salary (according to IRS) and a similar will be required to be accounted for in the pay expense form. Be that as it may, any utilization of such miles/focuses for purchasing an aircraft ticket won't be accessable.
NOTE:
As per chegg rule,
I have time limit to answering a question and i am completed my time limit for this question. Thats why i did only 2,3,4,5 here. If you need also, please upioad it as a another question.
Thank you.
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