Federal Tax Planning and Research
Federal Tax Planning and Research 4
Cabernet Vineyards, LLC
1. Write questions for the professor to answer to be able to do the Research memo
2. Write Research Memo: no maximum amount of words for this paper
Keep in mind:
– Technical support must be properly cited and then paraphrased.
Instructions to Access the Online Database:
Libraries.uc.edu/ select â€œOff Campus Accessâ€. Go to the Libraries drop down tab and click on Business and Economics. Click on the link called One-Stop Business Reseach .Srcoll down to Databases under Tax. You can select either: – CCH Internet Tax Service; or – RIA Checkpoint
Cabernet Vineyards, LLC (here after CV LLC) planted a new vineyard in 2010.
CV LLC added capital improvements (vines and fruit bearing trees)to the vineyards prior to the vineyards becoming income producing.
CV LLC placed additional tangible personal property in service in 2013.
GOAL: The client would like tax advice regarding the write off of assets via depreciation or some other allowable deduction. The client only wants you to research the allowable deductions related to the write off of the assets in the quickest manner possible. The client is not interested in deductibility of labor, financing costs or any other related costs â€“ just the quickest write off of the assets.
Prepare a tax research paper on the following questions for your client, CV LLC. be sure to address all applicable questions and primary sources. The format of the report should follow the standard file memo as posted in Blackboard or in Chapter 11 of the textbook. There is a blank example of a properly structured research memo under the course document link. When typing directly into this word document please change your font color (except to red) for easier grading.
In your supporting section be sure to properly cite specific code sections or other primary sources.
There are at least six relevant Internal Revenue/Regulation code sections that will be needed to support your argument.
There is an old Revenue Ruling that conflicts with the current interpretation of applicable law and has therefore been determined as no longer applicable.
PLEASE ANSWER THE FOLLOWING QUESTIONS: Please limit your research paper to the following questions.
In what year is CV LLC permitted to begin writing off the cost of the vineyards?
What is the applicable useful life of the vineyards?
What is the applicable useful life of any related capital improvements to the vineyards?
What (if any) allowable deductions are available to CV LLC to write off the cost of the vineyard, the related additional capital expenditures and any other assets added in 2013? Explain in detail why they are or are not permitted to utilize any available deductions. HINT: There is a very specific chain of code sections that must be followed to come to a conclusion.
You only need to focus on the write off of fixed assets related to the vineyards. You do not need to address any other applicable deductions related to the vineyards (interest expense if financed, labor costs etc.)
Make sure to address any regular write-offs as well as any special expense provisions (even if temporary) in the law for the applicable tax years.
What is the total amount that CV LLC can deduct in 2013 with regard to the write-off of the vineyards and any other property depreciable in 2013? Assume they wish to write all assets off under the quickest method allowable by law. Also, be sure to properly cite applicable tax law that permits any deductions (write-offâ€™s or expensing provisions). You may perform calculations using excel and attach them as an exhibit to your research memo. Be sure to properly format them in PDF so that they look professional before you upload your memo/exhibits. Assume that whatever you submit will also be presented as a deliverable to your client and that the client will be billed for such services.
Explain any possible limitations and/or restrictions and why CV LLC does or does not meet them. Be sure to properly cite the applicable primary sources that govern any limitations/restrictions.