Individual Income Tax Chapter 2

Research Chapter 2

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a. Prop. Reg. 1.864(b)-1(b)(2)(ii)(E) is Derivative means an evidence of an interest, or a derivative financial instrument (including any option, forward contract, short position and any similar financial instrument), in any; including, note, bond, debenture, or other evidence of indebtedness.

b. Rev.Proc. 2005-50, I.R.B. No. 32272 is Information returns: Eligible educational institution: Qualified tuition: Change in reporting method. It explains how an eligible educational institution may obtain automatic consent from the Service to change its method of reporting the income tax regulations. An eligible educational institution that complies with all of the conditions and procedures of this revenue procedure has obtained consent to change its method of reporting. (http://tax.cchgroup.com)

c. FSA 200228005 is an issue whether settlement proceeds received by a Taxpayer should be treated as income or as a reduction in the basis of the Taxpayer's land, also, whether certain settlement costs; legal fees, etc., should be treated as capital expenditures. The results were that settlement proceeds should be nontaxable return on capital as long as the extent does not exceed the Taxpayer's basis in the land purchases from A. The settlement proceeds should reduce Taxpayer's basis in the land. Any proceeds in excess of Taxpayer's basis in the land should be treated as capital gain, also legal fees and the cost of acquiring certain water rights and discharge units pursuant to the settlement should be capitalized. (http://tax.cchgroup.com)

d. IRC 32(c)(2)(A) is the term "earned income" and goes on to tell the meaning in the term.

e. Ramirez-Ota v. Comm., T.C. Summary Opinion, 2002-27 a case against Norma A. Ramirez-Ota and the Commissioner of the Internal Revenue. For the tax year of 97-98,

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