100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary 7-1 Activity: Client Letter TAX 655 Federal Income Tax of Corporations Southern New Ha $7.99
Add to cart
Quickly navigate to
Preview
  2.  
  3. Southern New Hampshire University
  4.  
  5. ACC 201

Summary

Summary 7-1 Activity: Client Letter TAX 655 Federal Income Tax of Corporations Southern New Ha
 0 purchase

7-1 Activity: Client Letter TAX 655 Federal Income Tax of Corporations Southern New Hampshire University 1 08:35:57 GMT -05:00 Juwan Smith and his 3 friends created Smith & Associates LLP, a limited liability part- nership where the income will be generated by representing those involved in b...

[Show more]

Preview 2 out of 5  pages

Document information

  • October 19, 2024
  • 5
  • 2024/2025
  • Summary

Subjects

  • under sec
  • 7 1 activity client letter tax 655 federal inc
  • a limited liability part nership where the incom
  • and will be split equally among them the interna
  • âsec 1402a13 provides that a guaranteed pa

Written for

All documents for this subject (601)

Seller

avatar-seller
newage

Reviews received

Content preview

7-1 Activity: Client Letter

TAX 655 Federal Income Tax of Corporations

Southern New Hampshire University




1




08:35:57 GMT -05:00

, Juwan Smith and his 3 friends created Smith & Associates LLP, a limited liability part-

nership where the income will be generated by representing those involved in bankruptcy and

foreclosures, and will be split equally among them. The Internal Revenue Service (IRS) started

taking legal action to clarify the application of self-employment tax laws to Limited Liability

Company (LLC). What I found is, “Sec. 1402(a)(13) provides that a guaranteed payment, under

Sec. 707(c), to an LLC member for services rendered is subject to self-employment tax. A signif-

icant number of taxpayers have claimed that none of the residual profits after deducting guaran-

teed payments, or so-called distributive earnings, are subject to self-employment tax even if

those earnings were allocated to a managing or otherwise actively working member. To be fair,

some taxpayers have taken a more conservative view by applying proposed regulations and lim-

ited case law to subject some or all of their distributive share to self-employment income tax”

(Lewis, 2018). This law allows for distributive earnings to be allocated to the limited partner and

be excluded for self employment tax. Limited partners can exclude their distributive share for

self employment tax. General partnership would be subject to self employment tax on their dis-

tributive shares. The LLC member can have limited liability and still be an active manager in the

LLC because when LLC’s are developed, the state you’re in, it’s statutes clash with that of fed-

eral tax law.

These partners at Smith & Associates LLP are offering a service to represent those in-

volved with bankruptcy and foreclosures and any payments are made to the company, not an in-

dividual. The way their company is structured and how payment is received, the partners

wouldn’t appear to qualify as self employed income. If it was a self employed tax, it would be

2




08:35:57 GMT -05:00

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller newage. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for $7.99. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

63950 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 15 years now

Start selling

Recently viewed by you

Exam (elaborations) ·

(0)

Surgical Technology for the surg tech Chapter 7 Questions and Answers(A+ Solution guide)

Exam (elaborations) ·

(0)

AFAA Primary Group Exercise Certification Study Guide| 160 QUESTIONS| WITH COMPLETE SOLUTIONS

Exam (elaborations) ·

(0)

AAAE CM - All Combined Module Questions with 100% Correct Answers | Latest Version 2024 | Verified

Exam (elaborations) ·

(1)

HESI FUNDAMENTALS PROCTORED RETAKE EXAM 2023 WITH NGN ACTUAL EXAM SCREENSHOTS |RATED A+

Package deal ·

(0)

AQA GCSE RELIGIOUS STUDIES A Paper 1: Christianity MAY 2023 QUESTION PAPER AND MARK SCHEME

Exam (elaborations) ·

(0)

NAPLEX PRACTICE Exam QUESTIONS & ANSWERS,/LATEST UPDATES, 2024/25/ EXAMS PREDICTION PAPER/

Exam (elaborations) ·

(0)

Test Bank For Roach’s Introductory To Clinical Pharmacology 11th Edition | Answers & Feedback

Package deal ·

(0)

Louisiana POST Bundled Exams Questions and Answers 100% Verified and Updated 2024 | Graded A

Exam (elaborations) ·

(0)

Fire Inspector 1 Study Questions | 140 Questions with 100% Correct Answers | Updated & Verified
$7.99
  • (0)
Add to cart
Added