Embezzlement activity is a trade or business

Assignment Help Business Management

Reference no: EM13992046

Don was a senior vice president of a bank until its officials found he had embezzled more than $1,000,000. Don had set up fictitious checking accounts and deposited the funds into the accounts. He then created fictitious loans to himself. The embezzled money was used for personal purposes and to keep the fictitious loan pay- ments current. Thus, he created fictitious loans to make payments on prior fictitious loans. Don worked hard to keep the loans current so he would not be detected. Because of a tax audit, he is seeking your advice. If his embezzlement activity is a trade or business, he claims he should be able to deduct as an ordinary and necessary expense the payments on the loans to keep his actions secret. What advice would you give Don concerning his business and deductions? Explain.

Reference no: EM13992046

Questions Cloud

Letter to carla explaining whether big star : During the current year, the grandson appeared in 100 commercials. Big Star wants to deduct the full $25,000 as a business expense. The grandson will report the $25,000 as income. Write a letter to Carla explaining whether Big Star can deduct the a..

Operating costs of the car for tax purposes : How should RayeAnn treat the operating costs of the car for tax purposes? In 2013, RayeAnn sells the car for $6,500. Her business use for 2011 through 2013 remains at 70%, and she properly deducted $5,880 in depreciation. What is her taxable gain ..

Expenditures related to the duplex : How should Hamid treat the expenditures related to the duplex? Explain.

Learning resources tab on the left navigation toolbar : Additionally, discuss the three major issues in benefit estimation that are posed in the text as well as the three major approaches to cost estimation. Make sure to discuss all topics in enough detail to show understanding of the content material,..

Embezzlement activity is a trade or business : Don worked hard to keep the loans current so he would not be detected. Because of a tax audit, he is seeking your advice. If his embezzlement activity is a trade or business, he claims he should be able to deduct as an ordinary and necessary expen..

Give an example of a national security issue : Give an example of a national security issue that affects Thailand''s health and how has or is the issue being addressed?

Calculate the net torque on the beam : Calculate the net torque (magnitude and direction) on the beam in the figure below about the following axes- an axis through O perpendicular to the page and an axis through C perpendicular to the page.

Is billy taking a random sampling : In the picture the can says "Mixed Nuts: Less than 50% are peanuts" and Billy says "I'm making sure less than half of these nuts are peanuts." Is Billy taking a random sampling

Deduction for the attorney fee : The only cost to Max in relation to the lease is an annual legal fee for renewing the lease. Is Max engaged in the trade or business of renting real estate? How would you classify his deduction for the attorney's fee?

User Account

All Pages