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Juwan Smith and three friends from law school recently formed Smith & Associates as an LLP (Limited Liability Partnership). Income from the partnership will be split equally among the partners. The partnership will generate their income primarily from representing clients in bankruptcy and foreclosure matters. While some attorney friends have suggested that partners' earnings will be self-employment income, other attorneys know that their local bar association meetings claim W2 or guaranteed income. After examining relevant authority, explain how you would advise Smith & Associates on this matter. This activity will support your ability to provide client advice in your Project Two milestone and in Project Two. Directions Considering the scenario above, write a 1- to 2-page client letter evaluating and advising this company on their tax planning strategy. Specifically, you must address the following rubric criteria: 1. Explain the ethical principles influencing the way this entity can choose to report their income. Consider the following in your response: a. Reporting the partners' earnings b. Partner income and its impacts self-employment or partnership c. Additional employees' payment d. Ethics withing reporting or not reporting earnings as self-employment 2. Evaluate two different tax planning strategies. Include the following in your response: a. Expense in each strategy b. Taxable income for each strategy 3. Discuss entity alternatives for this company. Include the following in your response: a. Entity organization that would result in a total reduction in tax liability b. Partnerships within the entity organization Juwan Smith and three friends from law school recently formed Smith & Associates as an LLP (Limited Liability Partnership). Income from the partnership will be split equally among the partners. The partnership will generate their income primarily from representing clients in bankruptcy and foreclosure matters. While some attorney friends have suggested that partners' earnings will be self-employment income, other attorneys know that their local bar association meetings claim W2 or guaranteed income. After examining relevant authority, explain how you would advise Smith & Associates on this matter. This activity will support your ability to provide client advice in your Project Two milestone and in Project Two. Directions Considering the scenario above, write a 1- to 2-page client letter evaluating and advising this company on their tax planning strategy. Specifically, you must address the following rubric criteria: 1. Explain the ethical principles influencing the way this entity can choose to report their income. Consider the following in your response: a. Reporting the partners' earnings b. Partner income and its impacts self-employment or partnership c. Additional employees' payment d. Ethics withing reporting or not reporting earnings as self-employment 2. Evaluate two different tax planning strategies. Include the following in your response: a. Expense in each strategy b. Taxable income for each strategy 3. Discuss entity alternatives for this company. Include the following in your response: a. Entity organization that would result in a total reduction in tax liability b. Partnerships within the entity organization
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Your Name Your Address City State Zip Code Date Juwan Smith Smith Associates LLP Address of the Company Dear Juwan Smith I hope this letter finds you well I appreciate the opportunity to provide guida... View the full answer
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
Posted Date:
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