In 2010, Jed James began planting a vineyard. The cost of the land preparation, labor, rootstock, and planting were capitalized. The land preparation costs do not include any non-depreciable land costs. In 2014, when the plants became viable, Jed placed the vineyard in service. Jed wants to know whether he can claim a deduction under section 179 on his 2014 income tax return for the costs incurred in 2010 with respect to planting the vineyard.
Requir: 1. You will write a letter to your client discussing the facts of the tax question, identifying the relevant tax issues and communicating your conclusion and any advice.
2. You will write a memo to the tax file discussing the facts of the tax question, identifying the relevant tax issues, including appropriate citations, and communicating your conclusion and any advice.
The general outline is as follos:
Paragraph 1: Identify the problem
Paragraph 2: Review the sources (code sections of tax law sources)
Paragraph 3: Arrive a solution