Janey, a college student, is on her own financially. She is much too busy with school to hold down any kind of traditional job. However, she does list herself on a number of dating websites and every weekend makes time to see one or more gentlemen. Janey googles all of her potential matches before agreeing to go out in order to confirm a high net worth or income. “I expect a gentleman to be generous,” she says to every potential date. She refuses to go out with anyone who hesitates at that. Janey never does anything illegal but at the same time isn’t shy about showing her appreciation for all she receives. One gentleman pays the rent on her apart-ment. Another pays her tuition for her. A third bought her a car. Some just give her cash... (a) It's 100% certain that everything Janey receives from these gentlemen qualifies as gifts as that term is used in the tax law and so would not need to be reported as “Other income” on her federal income tax return. (b) It's 100% certain that everything Janey receives from these gentlemen must be reported as “Other income” on her tax return because “dating” is her job for all practical purposes. Choose either (a) or (b), then defend your choice in 3-4 sentences. Or explain in 3-4 sentences why you would need more information before being able to make a decision regarding Janey’s tax situation.
Janey, a college student, is on her own financially. She is much too busy with school to hold down any kind of traditional job. However, she does list herself on a number of dating websites and every weekend makes time to see one or more gentlemen.
Janey googles all of her potential matches before agreeing to go out in order to confirm a high net worth or income. “I expect a gentleman to be generous,” she says to every potential date. She refuses to go out with anyone who hesitates at that.
Janey never does anything illegal but at the same time isn’t shy about showing her appreciation for all she receives. One gentleman pays the rent on her apart-ment. Another pays her tuition for her. A third bought her a car. Some just give her cash...
(a) It's 100% certain that everything Janey receives from these gentlemen qualifies as gifts as that term is used in the tax law and so would not need to be reported as “Other income” on her federal income tax return.
(b) It's 100% certain that everything Janey receives from these gentlemen must be reported as “Other income” on her tax return because “dating” is her job for all practical purposes.
Choose either (a) or (b), then defend your choice in 3-4 sentences. Or explain in 3-4 sentences why you would need more information before being able to make a decision regarding Janey’s tax situation.
Step by step
Solved in 2 steps
