Reference no: EM133087364

Research Case 1: Lance asks you to explain why his employer, the Good Food Truck Stop, an establishment that employees more than 30 waiters and waitresses on any given day, included $2,400 in tip income in Box 8 on his Form W-2 for the year. Although he has not informed the truck stop, Lance always has kept track of the tips he actually received, and has reported them in full on his tax return.

Research Case 2:
Joe Bacillus owns Bacillus's Italian Restaurant. A friend of Joe's who owns a sports bar comes to Joe and wants to form a partnership with Joe to buy an old building, renovate it, and then move both the restaurant and the sports bar into it along with other tenants. Joe would like to make this investment. He needs approximately $200,000 for his share of the buy-in of the partnership that will purchase, renovate, and manage the building. Because of other recent large expenses, however, Joe finds himself short of cash at the present time. His only large liquid asset is his self-directed IRA, which currently owns $225,000 in stocks and bonds. Joe proposes that he direct the IRA to sell the securities and to use the proceeds to invest in the building renovation partnership.

Conduct appropriate research (including an online search) to determine if Joe's plan is workable. Prepare (in good form) a research memorandum to the file.