MEMORANDUM

Date: November 24, 2015

To: Reviewer
From: Group 090 (Angel Gonzalez, Anthony Ayala, Exsamir Arroyo)
Subject: Assumptions on Filed Return

After evaluating the information found on our client, Sally Joshi, we successfully prepared the
necessary 2014 Form 1040 with all supporting schedules and forms using the 2015 H&R Block
Software. While completing Sally Joshis tax return, our group has made the following assumptions
to corresponding documents and entries.

Form 1040, Line 31a: We assume that Sally provided sufficient documentation regarding
the alimony payment [Code 215(a)].
Schedule A, Line 16 and 17: We assumed that (charitable organizations) provided the
necessary written evidence of the contribution and stated affirmatively that there was no
quid pro quo value delivered to Sally.
Schedule B, Line 7a, 7b, 8: We had assumed that Sally did not have foreign accounts and
trusts.
Schedule C, Line 1: We assumed that the amounts reported on 1099-MISC lines 2 and 3
were related to the same trade or business of writing in order to conclude that it was selfemployment income.
Schedule C, Line 11: We assumed that the research assistants were contract workers.
Schedule C, Line 24a: Our group assumed that both lodging and transportation were for
conducting a business purpose which was research, and Sally was away from her home
overnight [Code 162(a)].
Schedule C, Line 24b: We assumed that the meals away from home were ordinary and
necessary (neither lavish nor extravagant) expenses for Sallys business [Code 162(a)].
Schedule C, Line 25: Our group assumed 50% of the total cell phone bill is attributable to
conducting business [Code 162(a).
Schedule C, Line 27a: Our group presumed that the annual membership for PEN is
necessary for her business as a novelist/writer to produce income [Code 162(a)].
Form 8829, Line 10, 13, 23: We allocated 8.84% of mortgage interest, real estate taxes,
utilities, and condo fees to the business use of home [Code 280A(c)].

Aside from the data included on the attached documents, assumptions on excluded information are
as follow:

We presumed that Polly did not live with Sally for more than one-half of the year to be a
qualifying child according to Code 152(c)1(B);
The amount of $2,040 for unreimbursed medical expenses nor the $4,000 individual heal
care insurance(assumed only for Sally) did not exceed the 10% of the adjusted gross income
(AGI), thus the amount was included in itemized deductions due to Code 213(a);
We also assumed that her brother had health insurance since they do not have the
Affordable Care Act (ACA) penalty. (ObamaCare)
The inherited $80,000 cash was not included in the gross income due to Code 102(a);

The 50% marital stock portfolio was not recognized since Code 1041(a)(2)states that no
gains or losses are identified during transfers of property to former spouse due to divorce
and assumed that the spouse was a resident for tax purposes [Code 1041 (d)];
Sallys holiday gift to the building doormen was not deductible;
Girl scouts cookies is a personal expense, therefore, was not deductible;
Miscellaneous deductions on Schedule A were less than the floor, 2% of AGI.

By providing our signature below, we certify that we only discussed the substance of our particular return project between
our group members.

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Angel Gonzalez

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Anthony Ayala

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Exsamir Arroyo

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