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How would the general anti-avoidance rule affect transaction

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Reference no: EM131122438

Over the past two years, your client, a lawyer in sole practice, has developed several software packages for the preparation of legal contracts. At a recent small-business seminar, your client learned that she could pay her spouse and children a salary. By doing so, your client's total tax paid as a family unit would drop substantially.

REQUIRED: If tax is avoided, how would the general anti-avoidance rule affect the transactions?

Be sure to show all detailed calculations and explain answers fully. Give references to the ITA or other sources where possible.

Reference no: EM131122438

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