Mary Contrary, age 42, is a single mom caring for two children – Peter, age 15, and Muffett, age 12. Mary is a full-time employee of the Garden Grow Company and works as a lead botanist.
Part 1: Mary participates in Garden Grow’s dependent care assistance plan. In 2017, Mary incurred the following dependent care expenses:
• $2,500 for a part-time housekeeper
• $1,500 for Peter’s private therapy (Peter is mentally incapacitated due to a tragic accident involving a spider bite)
• $1,000 for Muffett’s after school program
• $575 for Muffett’s summer day camp
Which, if any, of the above expenses are allowable as non-taxable?
Please write a memo answering this question, citing appropriate authority.
An IRAC-style essay is appropriate for this assignment.
Part 2: In February 2017, Mary relocated from Los Angeles, CA to Las Vegas, NV, to manage the new branch Garden Grow opened that year. She incurred the following expenses:
• $275,000 for the purchase of a house
• $5,000 for selling her Los Angeles home and finding a home in Las Vegas
• $500 for packing and moving her household goods.
• $175 for moving-related travel between Los Angeles and Las Vegas.
Garden Grow reimbursed her but did not exclude the reimbursements from her income
Which, if any, of the above expenses are deductible? Why?
Please answer in one or two paragraphs. An IRAC is NOT necessary for this part of the assignment.