Tax Liability
Opening: This memo concerns the income tax questions for John and Jane Smith, a married couple. John is a lawyer and has questions regarding income to his firm, investment in office space, and overall preparation techniques. Jan has questions regarding business related activities, real estate investments, business expenses, and business investments.
John Smith
How is the $300,000 treated for purposes of Federal Tax income?
Under 26 U.S.C. Section 1402, "The term "net earnings from self-employment" means the gross income derived by an individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of income or loss described in section 702 (a)(8) from any trade or business carried on by a partnership of which he is a member"
All income earned during a business year is considered business income. This includes the $300,000 contingency fee. Under IRS Law, income can be spread out up to two years in the future or amended back up to 3 years. In the case of the $300,000 contingency fee, it would be more advantageous for John to amend this previous two returns and include $100,000 for each year he has been working on the case. This will lower his overall...
By doing so, the damage can be controlled until additional meetings can be held amongst all the employees. Do not overemphasize either the negative or the positive aspects of this decision, and be sure to be as up-front and truthful as possible in all discussions relating to this scenario. Keeping this advice in mind, will assist in the transition and be very helpful in calming the turbulent waters that are
Student Profile The student is a 29-year-old French speaking accountant whose employer is sponsoring him to come to the UK for a four-week intensive English course. Desired Proficiency This student should be able to deliver dynamic presentations, about twenty to thirty minutes in length, and engage in discussions about accounting and business practices. He should also be able to attend to lengthy presentations and phone calls on the same subjects. He will
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