Research Problem 2

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Research Problem 2. Anna Blackstone is a resident of Mt. Juliet, Tennessee. She is concerned about several items that may impact her 2020 federal income tax return. Anna is a cash basis taxpayer and files here return as single with no dependents. She is seeking your advice about how the following items will impact her return:

• ? Synthesis Advisors provides Anna with a monthly transit pass on the Music City Star ($280 value per month) for each month during 2020. Anna is concerned about whether this amount will be included in her income.
• ? Anna owns 300 shares of International Paper ("IP") common stock. She had purchased this stock in 2015 for $2,500. On September 16, 2020, Anna sold the shares of IP common for $1,500 and then purchased 250 shares of IP preferred stock two days later for $700. The IP preferred stock is not convertible into IP common stock. Anna is concerned about whether she can deduct the loss on the IP common stock.
• ? Anna purchased a building in 2020 that she intends to begin leasing. On November 15th, a tenant signs a lease on the building. The lease begins on December 1st and the tenant will pay Anna $500 per month for rent pursuant to the lease agreement. The rent payable on the first of the next month (i.e. rent paid in arrears), and the tenant must make a $500 refundable security deposit (due December 1st). The security deposit will be refunded at the end of the lease if there is no damage, etc. Anna is concerned about what amounts must be included in income for 2020.
• write a memo to the file along with a letter to Anna with the results of your research. Make certain to include references to primary authority, cite them,