Acct 553 - Week 4 Memo

Memorandum From: To:Mr. & Mrs. Smith Date:November 23, 2012 Subject:Tax Inquiries It was a pleasure clashing with you both, and hearing your concerns and questions regarding the implications of measure laws on your peculiar(prenominal) scenarios. I wear prepared this memorandum to address distributively of your individual and incorporated concerns. Once you both run with had an opportunity to review this memorandum, entertain feel free to fulfil me again to address any(prenominal) further concerns. John Smiths Tax Issues: 1(a). How is the $300,000 interact for purposes of Federal value income? The $300,000 will get to be include in your stark(a)(a) income for the year. Because it was earned in exchange for goods or services rendered, IRC 61. Under IRC 61, any income, from some(prenominal) source, is considered income unless you bottomland upraise that it can be exempted or excluded. In Reese v. United States, 24 F.3d 228, 231 (Fe deral Circuit 1994), the court stated that an invariable principle of national tax law is that, absent an enumerated exception, gross income means all(a) income from whatever source derived,. 1(b). How is the $25,000 treated for purposes of Federal tax income? It was undecipherable as whether this amount was deducted from the tax year when the movement took place.

If it has been expensed in the past, you must include this amount in your gross income for this year. If it has not, you may include it in this years income, whence you can deduct it as an expense from your Adjusted vulgar Income. 1(c). What is your goal regarding reducing the taxable amount of income for both (1a) and (1b) in a higher place? In ! order to address the issues of reducing this taxable income, I have the following suggestions: If you insist on keeping your suffice as an LLC, you will need to file cabinet a record C with the 1040. Also, as an LLC you are required to pay self-employment tax on the Adjusted Gross Income of the company. I recommend that you file the requisite paperwork to set up your...If you want to get a beneficial essay, order it on our website: OrderEssay.net

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