Discussion Post, Taxation

Assignment Help:
Background:
Thomas and his wife Diana have operated their own children''s daycare for the last three years. They also own the daycare facility, a building and the adjacent land located on 1322 Glades Road. They have a limited amount of working capital but do not foresee the need to make additional capital improvements in the near term. Their total business assets are about $250,000 with a $120,000 mortgage on the building as their only liability. In recent years they have not kept exact records, but have been able to withdraw any unneeded assets at the end of the year, which totaled approximately $50,000 in cash in 2013.
In 2013 they reported a net income of $85,000. In addition, Thomas has used his personal car for business travel and has charged the business mileage at the appropriate mileage when he has traveled to Miami for continuing educational credits and Diana has traveled to New York once each year for a trip with girlfriends and to attend a conference on childhood development. Although Thomas and Diana have never been sued, in recent months they have started to think about possible legal liability.
Write Discussion on This:
As a good friend of Thomas and Diana and a CPA, what is your opinion about incorporating the business going forward? List at least two reasons for or against incorporating, and any change the S-corp status would have on their taxable income from the company?

Related Discussions:- Discussion Post

Payroll, In May of the current year, your employer received a PIER report f...

In May of the current year, your employer received a PIER report from the CRA that identified Canada Pension Plan (CPP) contribution deficiencies for employees in the organization

Sale of principal residence, Sale of a Principal Residence. Marc, age 45, s...

Sale of a Principal Residence. Marc, age 45, sells his personal residence on May 15, 2014, for $180,000. He pays $8,000 in selling expenses and $900 in repair expenses to help sell

How much net income, Guay Corp a start up company provided services that we...

Guay Corp a start up company provided services that were acceptable to its customers and billed those customers for $350,000 in 2012. However, Guay collected only $280,000 cash in

Calculate the tax, Sue, Scarlett and Sally are in a partnership together pr...

Sue, Scarlett and Sally are in a partnership together providing accounting services.  The partnership uses the cash basis to account for income tax.  Under the partnership agreemen

Case law & study, should be on 2012 forms and done in pencil. It should inc...

should be on 2012 forms and done in pencil. It should include a schedule that shows the fiduciary income calculation and other relevant calculations. Jack Green established the Jac

Evaluate the accuracy of federal tax, A1 Evaluate the accuracy of the term ...

A1 Evaluate the accuracy of the term "New South" in describing the post-Civil War South, and discuss ways in which the term was and was not appropriate. A2 What was the Indian "

Capital cost allowance plen limited, On December 1 of the current year, Ple...

On December 1 of the current year, Plen Limited purchased a franchise for $70,000.The franchise has a limited life of 15 years. Which one of the following amount represents the max

Case study, Prepare a 2012 Schedule D, including Form 8949 and Form 4797 ba...

Prepare a 2012 Schedule D, including Form 8949 and Form 4797 based on the data provided. Provide a memo summarizing any assumptions made, if any. You do not need to prepare the tax

Study case of an exam of GST in new zealand, my level Master of the Paper G...

my level Master of the Paper GST ( law) I have an exam case I have already answered I need to revise the high level tutor ( 5000 words) Can you help me?

Earned income tax credit, Explain in words and show in figures how a lump-s...

Explain in words and show in figures how a lump-sum government transfer can entice some workers to stop working ( and no one to start working) while a policy like EITC can entice s

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd