You will submit a draft explaining the tax effects of salaries if cash is withdrawn from a business. You must also explain the tax consequences of paying the owners based on the taxable entity selected for the business, as well as the tax consequences for each individuals personal tax returns.

1. Explain the tax effect based on providing $180,000 per year for the clients salary and $70,000 per year for his daughters salary if they withdraw cash from the business or pay dividends as appropriate.

2. Justify the percentage of ownership the clients daughter should have in the business based on an S-Corporation. Consider the tax law in reference to an S Corp and how the decision will affect the daughters tax return.