Summary: Interpreting Tax Laws

A corporation is a separate legal entity that possesses distinctive liabilities and privileges than that of their members or shareholders. As an investor, a corporation’s advantage is liability for their own investments especially in risky investments (Kubasek, et al., 2012, p. 760). Among the various types of corporations for Betty to select from, an S corporation is an enticing venture for new entrepreneurs given that it grants limited personal liability for debts, sharing of corporate profits, and taxation relief. Double taxation is a main disadvantage of C corporations but not for S corporations. The General Corporation Law (Corp C §§100-2319) treats S corporations similarly to partnerships for taxation purposes.

There are three types of business entities: sole proprietorship, partnerships, and corporations. Sole proprietorships are businesses owned by an individual person. They are easy to form, but are not taxed. Instead the individual business owner is taxed on any monies acquired on behalf of the business (Kubasek, 2012. Partnerships are businesses that are owned by more than one individual owners. The big thing about partnerships is that each partner is personally responsible for the acts of the other partners in the business . (Kubasek, 2012 Corporations are businesses owned by multiple people to include shareholders (Kubasek, 2012). They can sue and be sued and are subject to a host of rules and regulations set forth by the government.

Part I: Discuss the various forms of organization that are available to Penelope, Mark and John. There are a few different options from which you can chose to organize your business under. For example: partnership, LLP, S Corporation, C Corporation for which I know you are all familiar with. It is my duty to give you my own educated and unbiased opinion to which would be most beneficial to all of you.

According to IRC § 1372 any person owning more than 2% of the S Corporation, or holding more than 2% of the voting power, is considered a partner of the business. What! The S Corporation shareholders are now a partners? Once it is understood that an S-Corporation is a hybrid between: a sole proprietorship, a partnership and a corporation, it all starts to make more sense.

When the United States Tax Code is reviewed, this definition is accurate in each of the four definition categories. It definitely is a systematic, albeit overly burdensome statement of a body of law. It is without a doubt a system of principles of rules and it does have signals or symbols for communication such as: Title (number), Subtitle (letter), Chapter (number) Subchapter (letter), Part (Roman numeral), a multitude of §§ (numbers) (Legal, 2015). To many taxpayers definition four may also relate to the Tax Code because it can appear to hold secret meanings because comprehension is difficult. In fact, according to the Taxpayer Advocate Service (2012) report to Congress, the most serious problems taxpayers must endure in relation of the Tax Code are that it: a) makes compliance difficult and requires an inordinate amount of time preparing their returns for filing; b) burdens the majority of taxpayers with an expense for compliance through the need to hire professional preparers or for specialized tax preparation software; c) Shrouds comprehension so that taxpayers are uncertain how their taxes are calculated and what their tax rate is; d) Fosters

Frederic Bastiat, a French intellectual who wrote about economics and government in the first half of the nineteenth century, penned, “When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” This paper will focus on the legal system that authorizes said plunder in the United States. The tax code of the U.S., as of early 2017, is complicated and extremely lengthy. The majority of Americans consult professionals who study the tax code, in order to pay what the government requires of them, because the average citizen cannot understand the complexities of it. There is a plethora of reasons that the United

In a Summary Opinion, the Tax Court has determined that a taxpayer could deduct the costs of obtaining a master of business administration (MBA) as unreimbursed employee expenses. The Court found that the MBA didn't qualify him for a new profession but rather refined his existing business and investment skills that he used in his former managerial position, and it further concluded that the taxpayer remained in the same trade or business before and after attaining the degree.

| If you are named in the business you are a partner and also liable

Persons who own and operate a Limited Liability Company, where the income received from the running of

Understanding the purpose and framework of taxes, assist with the understanding of the Tariff and quotas. Tariff is a tax placed on import goods by the government. Nevertheless, when one thinks about additional dollars added to the retail price of a good or service, it may be discouraging. Especially, since there is an abundance of services and goods desired by consumers- with so many wants, our resources are scarce. Meanwhile, there is a constant debate concerning the effects of tariff that are placed on imports and exports. Economist and scholars believe high taxes on imports and exports can hurt the economy. Indeed, there are advantages and disadvantages concerning the Tariff .

They will have the pass-through of income, avoiding double taxation, same as if the LLC was treated as partnership. Besides to the IRS, your business will exist separate and independent from its owners. Therefore, the business entity can pay wages and salaries to the owners. As it is treated as an S corporation may provide opportunities for tax planning to minimize the overall tax liability the business and would allow the business to take certain fringe benefits, too.

According to ordinary concepts of “resident”, an individual should satisfy the “Common Law test”. In this particular case, Andy spends the last three years working in Thailand, having signed a contract with a Canadian company in Australia, which doesn’t fulfill

What defines a nation’s way of life and standard for living depends entirely on its ability to function economically. In addition, the rate at which a country saves is the key to determining its prosperity from a long term perspective. More businesses with more facilities and more equipment equal a greater degree of productivity and greater income for employees. This formula transfers to show greater income for consumers and proves clear relationships between national saving rates and terms in which we measure economic well-being. In addition to the large scale national example, there is also an obvious connection between increased savings and families who

Business organizations operate in a variety of legal forms. The common forms are sole proprietorships, partnerships (general partnerships and limited partnerships) and corporations (traditional S and C corporations and limited liability corporations). The form of organizations is generally decided from the beginning of the business based on several factors, such as ease and cost of formation, capital requirements and cost of money, flexibility in managing and decision making, government rules, liabilities, risk and management, and tax considerations. The article titled “Decision Yields Hits and Misses for Plaintiff in Partnership Dissolution Case,” that I will discuss below is about a partnership dispute that lead to several claims, including dissolution claim.

There are a variety of sources that including tax law research such as primary and secondary sources and several other methods used to resolve a tax issue. Tax professionals have to be familiar with the IRC, which are organized paragraphs, sections, and parts. The administrative and judicial interpretations of the IRC are essential and necessary. “The Treasury Regulation provides administrative interpretations and Court opinions provide judicial interpretations” (Pope & Anderson, 2010, p. 1-7). By researching primary and secondary tax sources, court rulings, and substantial authority will provide a better understanding of how essential the tax research has become for advisors and tax practitioners to communicate tax consequences to clients.