Question 1 (4 points) Required: Discuss whether Emma's receipts from Larry constitute ordinary income (4 marks). Emma is

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Question 1 4 Points Required Discuss Whether Emma S Receipts From Larry Constitute Ordinary Income 4 Marks Emma Is 1 (46.75 KiB) Viewed 16 times

Question 1 (4 points) Required: Discuss whether Emma's receipts from Larry constitute ordinary income (4 marks). Emma is an employee in a stock broking firm. One of her regular rich clients is Larry. Emma has been responsible for giving Larry share advice for over 5 years. Although most of their conversations were held in the office where Emma worked, they would have lunch every few weeks. and would have dinner twice a year where they would discuss professional matters. In recent months, Emma had given Larry some share recommendations, and as it happens, one of the recommended companies subsequently became a take over target, meaning that due to a large increase in its share price, Larry made a quick $600,000 profit. As a result, Larry invited Emma to a lunch to celebrate. The day after lunch Larry gave Emma a return ticket to Paris (non-transferrable) worth $4,000 as well as a $20,000 cheque together with a card that stated thanks for your great share tips'. Larry had told another employee of the firm, Jim, that he was secretly in love with Emma, but told Jim not to say anything to Emma because Emma was already married.