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Taxation Consequences

Problem 1

Joey parked his car on the top of a hill when he went to watch the Superbowl games in San Diego. He did not properly set his brakes or curb the wheels when he packed the car. When he returned from the games, he found his car had rolled down the hill, smashed into Nick's house, and injured Nick, who was watching TV in his den. Joey does not have car insurance. List as many tax research issues as you can to determine the tax consequences of this accident. Do not attempt to answer any of the questions you raise. Simply identify the research issues.

Problem 2

John and Marsha are married and field a joint return for the past year. During that year, Marsha was employed as an assistant cashier at a local bank and, as such, was able to embezzle $75,000, none of which was reported on their joint return. Before the defalcation was discovered, Marsha disappeared and has not been seen or heard from since. List as many tax research issues as you can to determine the tax consequences of this crime. (CPA adaptive).

Solution Preview

Problem 1
Joey parked his car on the top of a hill when he went to watch the Superbowl games in San Diego. He did not properly set his brakes or curb the wheels when he packed the car. When he returned from the games, he found his car had rolled down the hill, smashed into Nick's house, and injured Nick, who was watching TV in his den. Joey does not have a car insurance. List as many tax research issues as you can to determine the tax consequences of this accident. Do not attempt to answer any of the questions you raise. Simply identify the research issues.

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Solution Summary

This solution explains both of the taxation scenarios presented. The tax elements and related consequences are fully discussed. The research issues are also identified in the first scenario and the tax consequences are identified in the second scenario.

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