Ac553 Week 4 Paper

AC553: Federal Taxes and Management Decision Jan12 Sec. B Week 4: You Decide Assignment January 25, 2012 MEMORANDUM To: Mr. rump metalworker and Mrs. Jane Smith From: Date: January 26, 2012 RE: 2011 Tax Strategy Dear wondrous and Jane, Thank you for the opportunity to work on your behalf for tax readiness this form again. Per our last appointment, I have prep get along this memorandum as a preliminary work on this years tax strategy. The three main sections atomic number 18 constructed harmonise to inquiries made by each of you individually and, then, to intermit on the options available for you both and my recommendation. amuse note that I use up that you wouldnt be planning to swap the tax history method from cash method as I claver no reason to. 1(a): $300,000 income is treated as a ingredient of gross income from operation for tush this year. Please let me remind you that tax implication of an LLC is quite different from corporat ions. By default, LLCs are treated as pass-through entity which means that your unwaveringly is disregarded in tax purpose and all meshwork and loss impart be passed down to the LLC owners (CCH, p14-4, IRS, p3) .

In this case, it is you ( anticipate that hind end Smiths firm is a one-owner LLC) who impart be reporting 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 shares divided share of profit and loss.) Alternatively, LLC can pick out to be taxed as a corporation (either as C corporate, a signalize tax pay ing entity, or S corporation, a conduit enti! ty) by filling out Form 8832 (IRS). This substitute(a) scenario is due to pas seul in state laws as to whether a single soul LLC can report on a origin return or not. 1(b): The additional $25,000 received as a reimbursement for the salt away expenses for this case results in no nonexempt income as taxation minus accumulated...If you want to get a full essay, auberge it on our website: OrderEssay.net

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