John Smith Esq. - Wk 4 - You Decide

MEMORANDUM To: nates and Jane Smith From: Joan Du Date: March 25, 2011 RE: Tax heading 1(a) The start-off question asked in regards to how the $300,000 angle afoot(predicate) by you, John Smith, Esq., should be case-hardened in detriment of income tax. Based from the information provided, I am assuming that the faithfulness practice you suffer is a single-member LLC as no other(a) members were mentioned. In terms of the IRS, LLCs atomic number 18 treated as sole-proprietorships or partnerships when there are several members involved. In this solecism, the $300,000 that you received as your fee received should be report on your personal income taxes. 1(b) The next question is how should the $25,000 you received as reimbursement for expenses paid for up front be treated in terms of income taxes. As you stated, the $25,000 was received as reimbursement for expenses that you paid up front. The beginning(a) thing we would need to sum up is whether or not y ou deducted the expenses within the tax returns for prior years. If the expenses were deducted as argument activities in prior years, then the $25,000 would be taxable. However, if the expenses incurred piece running(a) on this case were not deducted previously, then they would be non-taxable.

1(c) What is my finding regarding reducing the taxable amount of income for both the $300,000 and the $25,000? As the exuberant amount of the $300,000 was received after the closure of the case in a lump sum, then there is weeny to do in minimizing the taxes other than taking full advantage of the deductions allowed for bu sinesses. 2(b) Mrs. Smith, your first ! question is regarding what the different tax consequences would be on remunerative down the current mortgage and assuming a youthful mortgage for Federal income tax purposes. For the barters of the current home, the IRS states that married taxpayers outhouse exclude up to $500,000 of gain upon the sale of the residence. This exclusion applies to save to one sale or rally every two years. It is my recommendation that if...If you want to get a full essay, tack it on our website: OrderCustomPaper.com

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