After you “meet” with my client, you should prepare a three-page memorandum. The memorandum should outline the facts and the issue(s). Once you
provide this background information you should then present your analysis. Not only should you present the ethical issues and the rules that govern, if
relevant you should also detail the potential penalties applicable to the taxpayer and the tax practitioner for being derelict in his/her responsibilities.
ESSAY 1
Your client rents residential real estate to students. Since students love hot tubs, he puts a hot tub on the deck of every apartment. The client wants to
depreciate the hot tub over five years. Under federal law is deemed to be part of the real estate and thus subject to depreciation over 27.5 years. However,
when you
research the subject, you find a case in state court dealing with this exact issue for state income tax purposes; it indicates that the hot tub is separate from
the real
estate and can be depreciated over five years. The client wants to depreciate the hot tube over five years. Can you sign the return?