Instructions: For the following case, conduct tax research to answer the tax issue posed in the case. This tax research pertains to U.S. Tax law. Your research needs to include a sufficient amount of primary sources to support your conclusion. Primary sources from each of the three categories we have discussed need to be included in your final memo, sources needed are the following:
– At least 1 Section from the Internal Revenue Code
– At least 1 Regulation that is associated with the Internal Revenue Code section used
– At least 2 Revenue Rulings or Revenue Procedures
– At least 2 Tax Court Cases
I have attached the outline of the memo with the correct format. The body of your memo must be written in long form prose (ie full sentences) and include your primary source citations. I have included an example of a completed research paper as well within the attachments. Citations should be provided in text. No works cited page is required.
Case:
The Griffins were driving in a blizzard when a truck hit them as it was sliding off the road. The truck driver received minor injuries, but Wanda and Frank died at the scene of the accident. Amy, their eight-year-old daughter, was in the back seat and was seriously injured. Amy will eventually recover, but it will take a long time, and there will be some lasting physical damage. Frank and Wanda have a will that leaves all their assets to Amy. These assets include their house and its contents, investments, traditional IRAs, 401(k) retirement funds, and a life insurance policy with Amy as the beneficiary. The Griffins indicated that in case of their deaths, Wandas only sister, May, should be Amys guardian. Frank and Wanda requested that a trust be set up to control the money Amy will receive.
May filed a lawsuit against the driver of the truck, the company for which he works, and Frank and Wandas car insurance company. The accident was determined to be 90 percent the fault of the truck driver and 10 percent the fault of Frank, who was driving. The jury awarded Amy a large sum for the death of her parents and to cover Amys current and future medical costs. The jury also awarded amounts to cover the medical and funeral costs for Wanda and Frank. Amy received compensation for any mental anguish and for the partial loss of use of her right hand and arm. May was awarded a sum for the loss of her sister, Wanda.
May contacted your supervisor regarding the car accident, the deaths of Frank and Wanda, and the lawsuit. Please advise May on the current tax treatment of the inheritance that Amy is receiving as well as the compensation that Amy and May received from the lawsuit.
