Tax research problems
The parents in this case are entitled to the dependency exemption for their baby. They would have to per sec. 151 have to get a social security number for the child. The medical expense’s they incurred along with birth and death certificates would act as qualifying documents.
Anderson, K. (2015). Prentice Hall's federal taxation 2015: Individuals. Upper Saddle Ridge, N.J.: Pearson Education
HUD information along with Reg. Sec. 1.109-1 where termination of the lease is not applicable the conclusion I came to is that William would include the rent forgone as gross income. The verbal agreement they have and the each intention show that William should include the $1000 as rental income. http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp/FHLaws/109 I:4-65
In reviewing Sec. 123 – Reg. Sec. 1.123-1 states gross income does NOT include insurance proceeds received. The exclusion applies to amounts received as reimbursement for reasonable and necessary increase in living expenses to maintain during the loss period and considered actual living costs. The reimbursement is not taxable due to meeting the stipulations. http://www.law.cornell.edu/cfr/text/26/1.123-1 I:4-66
Because the Bold Corp. stated the $25 given to all employees is in recognition of the holidays it is taxable income and not deductible by the company. It would fall under a bonus and be treated as such. However,