...John Smith Tax issue 1(a) Issue: The issue is the $300,000 in income for John’s fees. How to treat this in Income Tax? Rule of Law: Section 61(a) of the Code the concept of income is broad and general. Gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; (2) Gross income derived from business; (3) Gains derived from dealings in property; (4) Interest; (5) Rents; (6) Royalties; (7) Dividends; (8) Alimony and separate maintenance payments; (9) Annuities; (10) Income from life insurance and endowment contracts; (11) Pensions; (12) Income from discharge of indebtedness; (13) Distributive share of partnership gross income; (14) Income in respect of a decedent; and (15) Income from an interest in an estate or trust. I.R.C § 61 Analysis: Section 61(a) it basically says that the gross income is not limited to these items, but that these are just the most typical sources of income. It is irrelevant whether or not the above items are received in money, goods, or services. Conclusion: The $300,000 that John received for services rendered from the court case is considered earned income for the year. The $300,000 is earned income for John Smith and will be reported as gross income either on Schedule C of the individual return or as gross income on the LLC return. ...
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...You Decide-Week 4 ACCT553 John Smith tax issues: a. How is the $300,000 treated for purposes of federal tax income? Mr. Smith, in regards to your $300,000 earnings for the successful litigation of your clients case, this will be treated as current year earnings. The payment fits all three doctrines of income starting with the economic doctrine which states “all income from whatever source derived” IRC Code Sec. 61 (a). The constructive receipt doctrine, outlining constructive receipt of payments, allows us to treat the payment for this current year only even though it was income from a case that lasted two years. “Income is not constructively received if the taxpayer’s control of its receipt is subject to substantial limitations or restrictions.” Reg. §1.451-2. Since these earnings were under the restriction of a successful verdict for your client, the payment could not be considered as earned any sooner than now. Since you operate your legal practice through an LLC, the assignment of income falls to the Limited Liability Corporation of which you are the primary member. Although the income is assigned to the LLC, there is only one layer of income tax, yours, since the LLC is treated as a conduit entity. All income will pass through to you as ordinary income, after business exclusions and deductions of course. The LLC is a disregarded entity and for federal tax purposes the activities of the business will be treated as if you were a sole proprietor (IRC Code Sec.752)...
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...Memo |To: |Mr. & Mrs. John Smith | |From: |----------, CPA | |CC: |---------------------- | |Date: |May , 2013 | |Re: |YOU DECIDE, WEEK 4 | John Smith Tax Concern 1(a): The issue is the $300,000 in income for John’s fees. How to treat this in Federal Income Tax? In reading Cornell University Law School (as much of this memo comes from) referencing the IRS code, Section 61(a), the code the concept of income is broad and general. Gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items; (2) Gross income derived from business; (3) Gains derived from dealings in property; (4) Interest; (5) Rents; (6) Royalties; (7) Dividends; (8) Alimony and separate maintenance payments; (9) Annuities; (10) Income from life insurance and endowment contracts; (11) Pensions; (12) Income from discharge of indebtedness; (13) Distributive share of partnership gross income; (14) Income in respect of a decedent; and (15) Income from an interest in an estate or trust. (I.R.C § 61) My investigation of this leads me to conclude that Section 61(a) basically says that...
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...Kimberly Pulda MIS 589 Week 4 You Decide To me there are a few important issues that need to be addressed. The first issue that needs to be fixed is from John Fischer. He states that his laptop operates at 10 megabits. That is really slow especially since it should have been running at 100 megabits. I would fix this by using a Category 6 UTP 1000 Base F Ethernet because it increases the maximum data transfer rate a hundredfold. For example it will take it from 10 megabits to 1 gigabyte per second! This type of transfer rate would definitely clear up congestion on the network, so there would not be issues in the morning when everyone is online doing attendance and checking emails. Even with the 23 other classrooms added to the network which will solve the principles issues with the slow network and the connection of all the classrooms. This type of bandwidth would make John happy because he is a HVAC Technician, and this will be usefull fort the remote access to his devices from home. This solution should make it easier for network accessories and peripherals such as printers and print servers. By working with such cabling with a built in CSMA/CD (Carrier Sense Multiple Access with Collision Detection) contention-based media access control technique, help address and solve the problem of collisions. To continue on, by assigning each network interface card (NIC) on each personal computer, it will minimize collisions to a number that users will not even see. Seeing...
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...AC553 You Decide Week 4 John and Jane Smith Tax issues and recommendation 1. John Smith Tax Issues: 1(a) How is the $300,000 treated for purposes of Federal Income Tax? Since the $300,000 was derived from a business activity the amount should be included in the Gross Income reported for the John Smith LLC (IRS Regulation 1.61-3(a)). The assumption is being made that none of the income has been reported previously and that the LLC using a cash basis accounting method (IRS Publication 334). Because the income is reported in the LLC the income will also be reduced by all appropriate Cost of Goods Sold relevant to the business activity. The deductions from income will follow the guidelines relating to IRS Code Sections 62, 162 and 212 which focus on clarifying that the expenses are reasonable and that they are necessary for the performance of the business activity. Once the applicable deductions and credits (including any Net Operating Loss carry forward amounts) have been realized from a tax perspective at the business level the Net Income from the business will flow through to the personal income level where it will be taxed at the marginal tax rate of the individual. Summary: The $300,000 will be reported as gross income for the business LLC (IRS Regulation 1.61-3(a)), which will then be reduced by the appropriate Cost of Goods Sold and any applicable Tax Credits (IRS Code Sections 62, 162 and 212). At that point the Net Income from the business will flow...
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...Taxes and Estate Planning John Smith Tax Issues 1. (a) Amount of $300,000 will be treated as self-employment ordinary income. Self-employment tax is a tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. If you use a tax year other than the calendar year, you must use the tax rate and maximum earnings limit in effect at the beginning of your tax year. Even if the tax rate or maximum earnings limit changes during your tax year, continue to use the same rate and limit throughout your tax year. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html 1. (b) Amount of $25,000 was paid to your office as recovery of expenses. If that was previously expensed, it will be considered an income to and will affect your tax rate. If the amount was held in escrow and was not expensed, you may deduct against expenses incurred during the case as business expense. To give an understanding about “deferred expenses” we will define it as assets used to enable cash paid out to counterpart of goods or services to be received in a latter accounting period when fulfilling the promise to pay is acknowledged. Even if a location tax incentive were treated as an amount paid to the taxpayer, it is generally not conditioned on the taxpayer’s actual use of the amount to acquire capital assets, and thus does not become a permanent...
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...MKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDE MKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ Contact us at: SUPPORT@WISEAMERICAN.US MKTG 420 WEEK 4 YOU DECIDEMKTG 420 WEEK 4 YOU DECIDE To Purchase this tutorial visit following link http://wiseamerican.us/product/mktg-420-week-4-decide/ ...
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...MKTG 420 WEEK 4 YOU DECIDE To purchase this visit following link: http://www.activitymode.com/product/mktg-420-week-4-you-decide/ Contact us at: SUPPORT@ACTIVITYMODE.COM MKTG 420 WEEK 4 YOU DECIDE MKTG 420 Week 4 You Decide MKTG 420 Week 4 You Decide Activity mode aims to provide quality study notes and tutorials to the students of MKTG 420 Week 4 You Decide in order to ace their studies. MKTG 420 WEEK 4 YOU DECIDE To purchase this visit following link: http://www.activitymode.com/product/mktg-420-week-4-you-decide/ Contact us at: SUPPORT@ACTIVITYMODE.COM MKTG 420 WEEK 4 YOU DECIDE MKTG 420 Week 4 You Decide MKTG 420 Week 4 You Decide Activity mode aims to provide quality study notes and tutorials to the students of MKTG 420 Week 4 You Decide in order to ace their studies. MKTG 420 WEEK 4 YOU DECIDE To purchase this visit following link: http://www.activitymode.com/product/mktg-420-week-4-you-decide/ Contact us at: SUPPORT@ACTIVITYMODE.COM MKTG 420 WEEK 4 YOU DECIDE MKTG 420 Week 4 You Decide MKTG 420 Week 4 You Decide Activity mode aims to provide quality study notes and tutorials to the students of MKTG 420 Week 4 You Decide in order to ace their studies. MKTG 420 WEEK 4 YOU DECIDE To purchase this visit following link: http://www.activitymode.com/product/mktg-420-week-4-you-decide/ Contact us at: SUPPORT@ACTIVITYMODE.COM MKTG 420 WEEK 4 YOU DECIDE MKTG 420 Week 4 You Decide MKTG 420 Week 4 You Decide Activity mode aims to provide...
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...not been addressed in the compliance report. The committee is going to meet after one week to review the correct policy and procedure to make sure its compliance. The main focus is to evaluate NCH status regarding communication. There are three joint standard that are being address in the evaluation. These standards are very vital when it comes to patient care and prevent any mistakes from happening during procedures. The following are three Joint Commission Standard that are related to communication 1. UP.01.01.01 Conduct pre-procedure verification process 2. UP.01.02.01 Mark procedure site 3. UP.01.03.01 A time out is performed before a procedure. The following documentation was used to show areas in need of improvement. Hand of check list Site identification and verification Policies not compliance UP.01.01.01 #1 Implement a pre-procedure process to verify the correct procedure, for the correct patient at the correct site: Note the patient is involved in the verification process when possible. The Nightingale Community hospital hand off pre procedure list has some limitation which are very vital when it comes to patient care .The first line on the form has identification/ armband on patient’s arm, but there is nothing addressing on procedure site or procedure to be done. There is not a place provided in which the patient procedure can be documented. This is will ensure that both you and the patient are identifying patient information #2 identify the items that must be...
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...Smith, Thank you for coming to our offices and allowing us to review and discus your concerns regarding your tax questions. I have been assigned to reply to your questions and I have listed my recommendations below. After you both have reviewed these recommendations, please contact me so we can go over any additional questions you may have. Mr. Smith’s questions: 1(a) How is the $300k treated for purposes of Federal tax income? According to the IRC §61(a)(1), “Except as otherwise provided in this subtitle, gross income means all income from whatever source derived, including (but not limited to) the following items: (1) Compensation for services, including fees, commissions, fringe benefits, and similar items”, the $300,000 you received must be included as part of your gross income, compensation for services, and as such it is taxable. 1(b) How is the $25,000 treated for purposes of federal tax income? The $25k you received as a recovery for expenses you paid in advance must also be treated as income. In general, an expense cannot be deducted if paid in advance. This is true for both the cash basis method of accounting and the accrual method of accounting. The prepaid amount is treated as an asset with a useful life extending beyond the current tax year, and carried over to the tax year where the expense applies. The Internal Revenue Service treats your out of pocket expenses, that you incurred in this contingency fee case, as a loan to you and therefore...
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...AC 553 W4 – You decide Will Penny Memo dated 9/30 John and Lisa, There many considerations to each of your tax questions. Please find them outlined below. One: $300,000 influx (fee) from lawsuit IRS Sec. 7701 states your LLC will be taxed as a partnership unless you elect to be taxed as a corporation. Since it is advantageous to you to be taxed as a partnership (pass through income versus tax on dividends), I will need to verify your LLC has been accepted by the IRS as a partnership. Code Sec. 448 permits that a LLC can be cash based for tax purposes. The alternative is electing to be accrual based. This is important as to the timing of your income from the law suit. The $300,000 will constitute income in this subject tax year if you are cash based since this is when you received it. However, under accrual method, you could have billed for services over the two years and the “right to receive” that income would be included in the tax year when the bill was created and sent to the client. As of right now, it looks like the $300,000 will be counted as income for this subject tax year. Next, let’s look at your expenses. Two: $25,000 as income? As we just discussed, the timing of expenses will vary depending on cash based versus accrual based accounting method. Since we are going to assume and verify that you are cash based, the $25,000 in expenses paid up front will not reduce your income in this subject year and the $25,000 received will be counted as income...
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...AC 553 YOU DECIDE WEEK 4 BEM TAX SERVICES MEMO TO JOHN AND JANE To purchase this visit here: http://www.nerdypupil.com/product/ac-553-you-decide-week-4-bem-tax-services-memo/ Contact us at: nerdypupil@gmail.com AC 553 YOU DECIDE WEEK 4 BEM TAX SERVICES MEMO TO JOHN AND JANE AC 553 You Decide Week 4 BEM Tax Services BEM Tax Services Memo To: John and Jane Smith From: Benedict Mitchell Date: [ 10/7/2011 ] Re: Tax Issues Upon reviewing the information you submitted to me concerning your taxes, they were several issues which I observed. First I will like to discuss John’s issues: * The $300,000 will have to be treated as ordinary employment income, subject to federal and state income taxes. * The $25,000 will have to be treated as an expense. * I have determined that you have to account for all qualified business expenses and only net income will be taxable. AC 553 You Decide Week 4 BEM Tax will provide a detailed memo that has been written to John and Jane Smith regarding the several issues of taxation. AC 553 YOU DECIDE WEEK 4 BEM TAX SERVICES MEMO TO JOHN AND JANE To purchase this visit here: http://www.nerdypupil.com/product/ac-553-you-decide-week-4-bem-tax-services-memo/ Contact us at: nerdypupil@gmail.com AC 553 YOU DECIDE WEEK 4 BEM TAX SERVICES MEMO TO JOHN AND JANE AC 553 You Decide Week 4 BEM Tax Services BEM Tax Services Memo To: John and Jane Smith From: Benedict Mitchell Date: [ 10/7/2011 ] Re: Tax Issues Upon reviewing the information...
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...The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS 310 Entire Course The Legal Environment DeVry Purchase here https://sellfy.com/p/NAvv/ Product Description LAWS 310 Entire Course The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS 310 Entire Course The Legal Environment DeVry Purchase here https://sellfy.com/p/NAvv/ Product Description LAWS 310 Entire Course The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS...
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...The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS 310 Entire Course The Legal Environment DeVry Purchase here https://sellfy.com/p/NAvv/ Product Description LAWS 310 Entire Course The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS 310 Entire Course The Legal Environment DeVry Purchase here https://sellfy.com/p/NAvv/ Product Description LAWS 310 Entire Course The Legal Environment DeVry LAWS 310 Heart of Atlanta Motel Homework Week 1 DeVry LAWS 310 Quiz Week 2 DeVry LAWS 310 You Decide What is Business Formation? Week 3 DeVry LAWS 310 Quiz Week 4 DeVry LAWS 310 You Decide Week 5 DeVry LAWS 310 Quiz Week 6 DeVry LAWS 310 You Decide Week 7 DeVry LAWS 310 Discussions Week 1-7 All Students Posts 532 Pages DeVry LAWS 310 Final Exam DeVry LAWS...
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