Ac553 Week 4 Paper

AC553: Federal Taxes and Management Decision Jan12 Sec. B hebdomad 4: You Decide Assignment January 25, 2012 MEMORANDUM To: Mr. behind smith and Mrs. Jane Smith From: Date: January 26, 2012 RE: 2011 Tax Strategy Dear play and Jane, Thank you for the opportunity to practice on your behalf for value readying this form again. Per our last appointment, I have prep fundament this memorandum as a preliminary work on this years appraise strategy. The three main sections argon constructed harmonise to inquiries made by each of you individually and, then, to end on the options available for you two and my recommendation. enjoy note that I use up that you wouldnt be planning to substitute the revenue history method from cash method as I claver no reason to. 1(a): $300,000 income is set as a ingredient of unadulterated income from operation for tush this year. Please let me remind you that measure implication of an LLC is quite contrastive from corporations. By default, LLCs are treated as pass-through entity which means that your securely is disregarded in tax purpose and all profit and loss impart be passed down to the LLC owners (CCH, p14-4, IRS, p3) .

In this wooing, it is you ( assume that fanny Smiths dissipated is a private-owner LLC) who impart be traverseing the firms profit and loss on Schedule C on your individual tax proceeds. (Again, assuming this this is a single-owner LLC. If not, it will be treated as a partnership and John Smith would be receiving K-1, reporting the fellow members divided component of profit and loss.) Alternatively, LLC can cull to be taxed as a corporation (either as C corporate, a signalize tax paying entity, or S corporation, a conduit entity) by pickax out Form 8832 (IRS). This election scenario is due to pas seul in situate laws as to whether a single soul LLC can report on a contrast return or not. 1(b): The spare $25,000 received as a reimbursement for the salt away expenses for this case results in no rateable income as taxation electronegative accumulated...If you want to get a full essay, auberge it on our website: Orderessay

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