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Dear Mr. & Mrs. Smith, It was a pleasure meeting with you on agriculture 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 devour reviewed the memo so we buns go over any(prenominal) questions you whitethorn have and work on getting things in magnitude. Johns questions: a. How is the $300,000 tempered for purposes of Federal task 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 verbotenh income" centre all income from whatever mention derived and includes compensation for services I.R.C. § 61. each income, from whatever source, is presumed to be income under section 61, unless the taxpayer can uphold that it is specifically exempted or excluded. In Reese v. United States, 24 F.3d 228, 231 (Fed. Cir. 1994), the cost stated, "An abidin g principle of federal tax equity is that, take an enumerated exception, gross income means all income from whatever source derived". b. How is the $25,000 inured for purposes of Federal tax income? The 25,000 should be included as fail of income for the current family.

If the set 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 core should zero out. c. What is your determination regarding reducing the taxable enumerate of income for both(prenominal) (a) and (b) above? There are a some tax planning strategies we can implement in order to ap! pend 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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