In this project, you must conduct tax research using Checkpoint Edge and provide
advice on the hypothetical tax problem presented. You will communicate your research
findings in writing as a tax memorandum. The tax memorandum should be submitted
using the format in Exhibit 2-9 – Sample Internal Research Memo on page 2-20 of
your textbook (found in chapter 2). However, please do not indent the section as
presented in the exhibit. Please see the Example Tax Memo posted to D2L illustrating
the desired format.
Please note that you are not required to submit a client letter, as discussed in the
textbook. You are ONLY required to draft a tax memorandum. Information on
conducting tax research and writing a tax memo can be found on pages 2-17 to 2-22.
Please also see the additional resources posted to D2L under the “Tax Research
Project” content folder.
Your tax memorandum should be no longer than the tax memorandum in the text. That
is, I expect your single-spaced tax memorandum to be at most 1 to 2 pages. Your tax
memorandum is worth 50 points and is due by 6:00 pm on Tuesday, April 9th. If your
tax memorandum is submitted late and without prior consent from the instructor, you will
earn no points. Your memo grade will be based on the grading rubric posted to D2L.
Tax Research Problem
In 2023, Ria Patel was hired by the Philadelphia Orchestra as a professional concert
cellist. Ms. Patel has been training as a cellist since a young age and is ecstatic about
the opportunity. Playing for the Philadelphia Orchestra is truly a dream come true.
Her first three years at the Philadelphia Orchestra will be probationary, and she will
operate as an independent contractor. That is to say, she will be self-employed and
must provide her instrument. She will be compensated per performance until the end of
her probationary period. Ms. Patel will join the Philadelphia Orchestra as a full-time
musician if she performs satisfactorily.
To improve her performance, Ria decided to purchase a 225-year-old antique cello. The
antique cello cost $80,000. Her motivation for buying an antique cello was two-fold.
First, cellos from this era are famous for delivering a more robust sound than a modern-
day instrument. Second, an antique cello is considered a good investment that will
continue to appreciate in value. She plans to use the newly acquired antique cello as
her primary instrument for practice and concerts.
1
Considering her future tax filings, Ms. Patel has engaged your accounting firm to
conduct tax research on her newly acquired asset. She wants to know if she can
depreciate the cello as a business-use asset. Your manager, David Horn, has assigned
the initial research to you. Mr. Horn would like you to draft a tax memorandum for Ms.
Patel, documenting your analysis on whether the antique cello is depreciable.
Research Aids:
Mr. Horn suggests you use Checkpoint Edge to conduct your research. He has provided
the following research aids but believes additional primary authority is likely needed to
solve the issue.
§167
Reg. §1.167(a)-1
Note – The above research aid will guide you in understanding the general law around
the issue above. However, as you will read, the general law can be subjective and open
to interpretation. The courts have heard cases VERY similar to Ms. Ria Patel’s case,
and one case in particular is most applicable to the facts presented above. Accordingly,
there is a case that you will need to locate to document your conclusion correctly. Use
Checkpoint Edge to find the Tax Court case. Don’t hesitate to contact me if you have
any issues locating the case pertaining to this research problem
