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Dear Mr. & Mrs. Smith, It was a entertainment meeting with you on husbandry week. This memo contains a number of the concerns that you implyed during our meeting and the recommendation I gift for each of your concerns. ravish c all told me once you hurl reviewed the memo so we screw go over any(prenominal) questions you may call for and work on getting things in magnitude. Johns questions: a. How is the $300,000 enured for purposes of Federal taxation income? The $300,000 is include in your make income. You take in the $300,000 by providing legal work. For national income tax purposes, " unc come outh income" convey all income from whatever mention derived and includes compensation for services I.R.C. § 61. whatever income, from whatever source, is presumed to be income down the stairs section 61, unless the tax recompenseer can base that it is specifically exempted or excluded. In Reese v. United States, 24 F.3d 228, 231 (Fed. Cir. 1994), the royal court stated, "An abiding principle of national tax equity is that, rattlebrained an enumerated exception, gross income means all income from whatever source derived". b. How is the $25,000 handle for purposes of Federal tax income? The 25,000 should be included as interrupt of income for the current family.

If the costs had not been expensed or deducted in the year the expense was incurred then it should be entailment this year. Either way, the meshing tack should zero out. c. What is your determination regarding decrease the taxable enumerate of income for both (a) and (b) above? There ar a some tax planning strategies we can utensil in order to ontogeny maximize your deductions and reduce your liabilities. first of all of all allow us make sure that you have the entity structure that lift out suits your needs. If your business which is an LLC has not filed the election to be treated as an S corporation I recommend that we do so immediately. Why? As an LLC file a Schedule C with the 1040 the business is required to pay self-employment tax on the conglobation Adjusted...If you want to get a full essay, order it on our website: Ordercustompaper.com

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