Accounting

Memo To: rump & angstrom; Jane Smith From: Date: [ 8/12/2012 ] Re:Memo summarizing various revenue issues 1. John Smiths valuate issues: burn A) How is the $300,000 hardened for purposes of federal tax income? applicable Law & synopsis: The $300,000 you earned from your go as a attorney is going to have to be account as unwashed income. As arm 26, 61 understandably stats in the U.S cipher gross income means either income from whatever source derived, including (but non bounceed to) the following items: Compensation for services, including fees, commissions, fringe benefits, and kindred itemsand so forth According to tax law the $300,000 you accepted from compensation for your services would have to be reported and impart be taxed. at that place is however the option (if you so choose) to not receive the retributions all told at once. Much care the option in a lottery winning, you could quite perchance opt to receive the payment all over a a couple of(prenominal) familys instead then limiting your tax liability. Although, this may not be in your best interest depending on your current state of finances. expiration: You give have to report the $300,000 as gross income in addition to your other taxable income and you exit be taxed accordingly.

If you would quite a receive your payment over the course of a few forms instead as explained erstwhile then you would limit your tax liability for the $300,000 earned. Issue B) How is the $25,000 treated for purposes of federal tax income? Applicable Law & Analysis: The $25,000 wi ll be able to be deducted (if you already ha! d not deducted them in the previous year) as a business expense. If you did not deduct them in the previous year then you will need to phonograph record them down as a business deduction this year to further limit your tax liability. The U.S Code in section 26, 162 states: There shall be allowed as a deduction all the ordinary and necessary expenses paying(a) or incurred during the taxable year in carrying on each trade or business, includinga...If you postulate to get a unspoiled essay, order it on our website: OrderCustomPaper.com

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