Tax Research Paper #2 Purpose Thisassignment is to assess your ability to: Conduct tax research by establishing the facts relating to a tax question, identify the tax issue, find appropriate tax...

Tax Research Paper #2 Purpose This assignment is to assess your ability to: Conduct tax research by establishing the facts relating to a tax question, identify the tax issue, find appropriate tax authority, analyze such authority and derive a tax conclusion. Document and communicate the end product of your tax research in an internal research memo format using appropriate tax research methodology as customarily used in practice and learned in your class. Overview Complete tax research on assigned tax problem utilizing the following tax research methodology, and communicate such in a 2 to 3 page paper addressing fully the relevant sections.  Each tax research memo should include the following steps: Step 1:  Understand factsStep 2: Identify issues (“Issue”)Step 3: Locate relevant authorities (“Rule”)Step 4: Analyze tax authorities (“Analysis”)Step 5: Develop Conclusion (“Conclusion”) This is sometimes referred to in accounting and legal practice lingo by the acronym, “IRAC.”  If this helps you remember the process, great!  Just do not forget that in practice the facts are critically important and a critical beginning and reiterative element to the research process. Once the results are completed, you need to communicate your tax research.  A sample internal research memo is provided in your textbook at Exhibit 2-9.  It includes all five of the above steps, but the ordering and documenting of the steps in the memo that is efficient for review and will be used in our course is as follows:  1) FACTS; 2) ISSUE; 3) AUTHORITIES; 4) CONCLUSION AND 5) ANALYSIS. Action Items Complete the research problem as assigned by your instructor. Below is the problem: Fontenot Corporation sold some machinery to its majority owner Gray (an individual who owns 60 percent of Fontenot). Fontenot purchased the machinery for $100,000 and has claimed a total of $40,000 of depreciation expense deductions against the property. Gray will provide Fontenot with $10,000 of cash today and...