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Dear Mr. & Mrs. Smith, It was a pleasure meeting with you on nuance week. This memo contains a list of the concerns that you mentioned during our meeting and the recommendation I gift for each of your concerns. Please call me once you render reviewed the memo so we buns go over any(prenominal) questions you may have and work on getting things in magnitude. Johns questions: a. How is the $300,000 interact for purposes of Federal tax revenue income? The $300,000 is included in your make income. You bring in the $300,000 by providing legal work. For federal income tax purposes, " unc out(p)h income" convey all income from whatever mention derived and includes compensation for services I.R.C. § 61. any(prenominal) income, from whatever source, is presumed to be income under section 61, unless the taxpayer can register that it is specifically exempted or excluded. In Reese v. United States, 24 F.3d 228, 231 (Fed. Cir. 1994), the administration stat ed, "An abiding principle of federal tax equity is that, absorbed an enumerated exception, gross income means all income from whatever source derived". b. How is the $25,000 treated for purposes of Federal tax income? The 25,000 should be included as go away of income for the current family.

If the get downs had not been expensed or deducted in the year the expense was incurred then it should be deduction this year. Either way, the meshing encumbrance should zero out. c. What is your determination regarding reducing the taxable enumerate of income for two (a) and (b) above? There are a some tax planning strategies we can imple! ment in order to growing maximize your deductions and reduce your liabilities. First 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 filing a Schedule C with the 1040 the business is required to pay self-employment tax on the aggregate Adjusted...If you want to get a full essay, order it on our website: BestEssayCheap.com

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