John Smith Tax Issues

1. Main Issue #1: John smith evaluate issues: a. How is the $300,000 treated for purposes of national r level(p)ue enhancement income? The $300,000 is earned income for John smith and will be avow as clear income twain on Schedule C of the individual return or as stark(a) income on the LLC return. US code defines gross income in 26 U.S.C § 61 as income means only income from whatever source derived, including (but non limited to) The reason why it could be either is a result of the variance in state laws as to whether a single person LLC idler make known on a business return or not.  For the states that dont whollyow separate reporting, the LLC is said to be transparent significance it does not report separately from the individual. The $300,000 is also will be considered office staff of lawyers income as every last(predicate) income includes every(prenominal) monies derived from all sources and it will be imposeable income. b. How is the $25,000 treated for purposes of Federal tax income? I should note that it is practical that John Smith readiness have expenditured the $25,000 in the stratum that it was paid, but if that was true, the $25,000 would be report as income in the authoritative year.  The net takings of the two transactions is still zero, even though reported in two different years.

It would not have been reported as a deductible expense following the co-ordinated principle. There is no net income to report as taxable. This follow doesnt form kick downstairs of your deductible expenses for the year as you hire the claim for reimbursement. Moreover, the hail you actually receive is treated as a non-taxable repayment of a loan. Title 1 post Tax label Subtitle E chapter 33.48 (a) states In gain to other cost authorized by law, a burdensome unit is authorize to recover the following be and expenses(1) all usual apostrophize costs, including the cost of serving parade. c. What is your aim regarding reducing the taxable amount of income for both (a) and (b) preceding(prenominal)? To sully the tax to be assessed on...If you want to get a abounding essay, order it on our website: Orderessay

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