Accounting

Memo To: fast one & angstrom; Jane Smith From: Date: [ 8/12/2012 ] Re:Memo summarizing various revenue issues 1. John Smiths value issues: burn A) How is the $300,000 inured for purposes of federal tax income? applicable Law & summary: The $300,000 you earned from your go as a attorney is going to have to be describe 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 sympathetic itemsand so forth According to tax law the $300,000 you real from compensation for your services would have to be reported and leave be taxed. at that place is however the option (if you so choose) to non receive the retributions all told at once. Much akin the option in a lottery winning, you could quite by chance opt to receive the payment everywher e a a couple of(prenominal) familys instead then limiting your tax liability. Although, this may not be in your best interest depending on your on-line(prenominal) state of finances. expiration: You go out have to report the $300,000 as gross income in addition to your other taxable income and you ordain be taxed accordingly.

If you would quite a receive your payment over the course of a few forms instead as explained once 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: T he $25,000 will be able to be deducted (if y! ou already had 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 compensable or incurred during the taxable year in carrying on any trade or business, includinga...If you postulate to get a ample essay, order it on our website: OrderCustomPaper.com

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