ACCTG321 - Case 7

ACCTG321 - Case 7 - TAX REASEARCH MEMORANDUM Date To From...

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TAX REASEARCH MEMORANDUM Date: March 22, 2010 To: Tax Files From: 810828350 Subject: Income Tax Outcome Related to Dr. Colbert’s Donation Summary of Facts Professor Stephen Colbert, professor of film and television production at Hollywood University, has generated a consulting business entity. He has established a separate office in his home to conduct business with his clients. In 2008, Hollywood University suffered severe budget cuts. With the domino effect in full force, their reputation began to decline. In response, Dr. Colbert made a large donation of $500,000 to the Jonny Carson School of Talkshowology at Hollywood University. He decided to make this donation under his consulting firm which generated $600,000 (before the donation) of taxable income. Because of this, he reported taxable income from his business of $100,000 after the deduction was made. Issue What is the income tax outcome of Dr. Stephen Colbert’s donation? Law and Analysis Because the payment was made in the same tax year, Dr. Stephen Colbert is given the right to make a deduction under §170(1)
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This note was uploaded on 10/24/2010 for the course ACCTG 321 taught by Professor Will during the Spring '08 term at San Diego State.

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ACCTG321 - Case 7 - TAX REASEARCH MEMORANDUM Date To From...

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