As per the agreement between Jack and Joshua, the $900,000 was paid to Jack as Joshua’s attorney. Upon receipt of the funds Jack immediately paid Joshua $600,000, keeping $300,000 for himself. Question: Prior research revealed that the settlement was taxable income to Joshua. How should Joshua report/deduct Jack’s $300,000 legal fee? Specifically he would like to deduct it other than as a miscellaneous itemized deduction, which would give him no tax benefit due to the Alternative Minimum Tax.
Braswell v. United States In the case of Braswell v. United States 1988; Braswell was the sole shareholder and officer of two companies which specialized in the buying and selling of timber, oil interests, land, and machinery. (Melvin, 2011, p.569) Braswell was being investigated by federal authorities thus they subpoenaed him for his business records. Braswell refused and pleaded to use his right of the Fifth Amendment claiming that it protects business owners against self-incrimination. This paper will discuss the following: If a corporation has been recognized as a legal “person” for First Amendment purposes, shouldn’t the Fifth Amendment protect it too, What if Braswell’s company was a sole proprietorship rather than a corporation, What
After thinking about the information you submitted to me about your taxes, there were several issues which I observed. Firstly, I would like to talk about John Smith's issues: 1(a) I think the $300,000 received by John Smith as fees from jury award is taxable for federal tax income purposes. Because as the IRC Sec 104(a)(2) law: any winnings in a personal injury lawsuit that cover the treatment of physical injuries are not taxable except for attorney fees which are taxable. Taxability also depends upon the place of residence of the taxpayer. (1) In Codman Vs. Commissioner, held that attorney fees paid to the attorney not to be included in the gross income of the claimant in favour of whom the personal injury lawsuit is settled.
An corporations liability is limited to its assects, so the owner or the shareholders are protected from personal claims unless they commit fraud. Now because Tom did not follow the law of an incorporation by having corporate minutes his company has commited fraud. The court will see a case of fraud and In my opinion will lose the
Explain. [Bannister v. Bemis Co. , 556 F.3d 882 (8th Cir.2009)] Case brief: Bemis Co, breached the covenant not to compete, the breach was material. Bannister could not accept employment with a Bemis competitor, but Bemis was to pay Bannister his salary. There was no term for a partial release. Bemis “released” Bannister to seek employment with one exception—Mondi Packaging.
The parole evidence rule requires, in the absence of fraud, duress, mutual mistake, or something of the kind the exclusion of all prior or contemporaneous oral or written evidence that would add to or vary the parties’ integrated written contract.”(Mallor, 2013, Pp448-451). Therefore, paying the taxes by the seller would be considered as if it “supplement, change, or contradict the terms of the written contract”. The contract also contained a clause requiring any modifications of the contract to be in writing, and Dyer failed to include the salesperson’s promise in writing. The court ruled the case in favor of Walt Bennett Ford. http://ar.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19820414_0043514.AR.htm/qx Mallor, Barnes, Bowers, & Langvardt (2013).
Case 1 Solution: Problem Identification: How should a company report, if at all, cash and non-cash transactions owed to an entity’s financial subsidiary? Keywords: Cash flows; financ* subsidiaries; operating income. Conclusion: Per ASC 230-10-50-5), Mead should exclude transactions that involve no cash payments or receipts. However, per 230-10-45-17, it should record cash payments to GMCC for repayments of principle (and interest thereon) due to suppliers or their subsidiaries as operating cash (out) flows. Case 2: Narda Corporation agreed to sell all of its capital stock to Effie Corporation for three monthly payments of $200,000.
In 2013 the couple sold their house for $500,000 and bought a new house for $700,000 in cash. When they sold their house they paid 6% to the real estate agent which in total was $30,000 in fees. They file jointly and had joint ownership of the sold property. Research Issue Is the sale of the home in 2013 made by Mr. Junkiewicz and his wife a taxable transaction? Law and Analysis The taxpayer relief act of 1997 exempted from taxation the profits on the sale of a personal residence of up to $500,000 for married couples filing jointly and $250,000 for singles.
If no documents are forged, and if practices are properly approved and disclosed, appropriately accounted for, properly treated for tax purposes and in accordance with the terms of the option plan, most option granting practices should fall safely within the law (Rives, 2006). Legally as long as all of the paper work is met and the taxes are paid this is a perfectly legal process, however ethically it is illegal. A CEO has social responsibilities as well as responsibilities to his or her organization. For a CEO to profit when his or her corporation is in a slump or reporting tragic losses on its balance sheet, this is not a time for a CEO to be cashing in. This demonstrates poor judgment and poor faith in ones company.
Through the Micheal Lewis’s article, I found two main reasons which could determine the crime for him. First, He was only 15 years old, at this age, he was illegal to step into stock field and even his father helped him. It is said in Micheal Lewis’s article: “On Sept. 29, 1996, Jonathan's 12th birthday, a savings bond his parents gave him at birth came due. ” Second, what he did in stock market was called “pump and dump”. He used 20 fictitious names and posted blogs:” Jonathan Lebed had used "20 fictitious names" In his blogs, he claimed that he had heard that the price of the stock of the company would go up soon.