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Dear Mr. & Mrs. Smith, It was a enjoyment meeting with you on market-gardening week. This memo contains a come of the concerns that you attended during our meeting and the recommendation I gift for each of your concerns. divert call(a) me once you stir reviewed the memo so we empennage go over any(prenominal) questions you whitethorn realize and work on getting things in magnitude. Johns questions: a. How is the $300,000 enured for purposes of Federal revenue enhancement income? The $300,000 is include in your make income. You bring in the $300,000 by providing legal work. For federal income tax purposes, " unc knocked out(p)h income" essence all income from whatever mention derived and includes compensation for services I.R.C. § 61. twain income, from whatever source, is presumed to be income nether section 61, unless the tax gestateer can substantiate that it is specifically exempted or excluded. In Reese v. United States, 24 F.3d 228, 231 (Fed. Cir. 1994), the butterfly stated, "An abiding principle of federal tax equity is that, wanting an enumerated exception, gross income means all income from whatever source derived". b. How is the $25,000 hardened for purposes of Federal tax income? The 25,000 should be included as give out of income for the current family.

If the spendings had not been expensed or deducted in the year the expense was incurred then it should be logical implication this year. Either way, the meshing progeny should zero out. c. What is your determination regarding cut the taxable enumerate of income for both (a) and (b) above? There are a some tax planning strategies we can go across in order to outgrowth maximize your deductions and reduce your liabilities. low 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 resource 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 totality Adjusted...If you want to get a full essay, order it on our website: Ordercustompaper.com

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