Charles Smith won a million-dollar lawsuit in 2016 against a pretend doctor. Smith's attorney kept $400,000 and Smith got $600,000. On his 2016 tax return, Smith reported a $600,000 income on his tax return. But the IRS had a different approach to the income reported by Smith. Smith is married to Martha and filed a joint tax return for 2015. Calculate the tax liability for Smith under the IRS’s approach and under Smith’s approach.

Explain Miscellaneous Deduction –subject to 2 % and not subject to two percent. Elaborate on Legal Expenses in a lawsuit. Taxability of income in law suite-Personal Injury and non-personal injury. MAKE SURE YOU CITE THE CODE SECTION AND IRS REGULATIONS. Discuss the 2018 law pertaining to miscellaneous deductions.

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Calculate the tax liability for Smith under the IRSs approach and under Smiths approach Smith got 600000 Smiths attorney kept 400000 IRSS approch Total lawsuit proceeds received 1000000 Taxable lawsui... View the full answer