You will submit a draft explaining the tax effects of salaries if cash is withdrawn from a business. You must also explain the tax consequences of paying the

owners based on the taxable entity selected for the business, as well as the tax consequences for each individual’s personal tax returns. This assignment will

address Section I, Parts D and E of the critical elements of the final project.

Specifically, the following critical elements must be addressed:

I. Memorandum

D. Explain the tax effect based on providing $180,000 per year for the client’s salary and $70,000 per year for his daughter’s salary if they withdraw

cash from the business or pay dividends as appropriate.

E. Justify the percentage of ownership the client’s daughter should have in the business based on the type of business entity recommended.

Consider the tax law in reference to the recommendation and how the decision will affect the daughter’s tax return.

 

Guidelines for Submission: Your paper must be submitted as a 2- to 3-page Microsoft Word document with double spacing, 12-point Times New Roman font,

one-inch margins, and at least three sources cited in APA format.

Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

Memo: Tax Effect on Cash

Withdrawals or Dividends

 

Explains the tax effect based on

providing the client and his daughter

salaries if they withdraw cash from

the company or pay dividends

 

Explains the tax effect based on

providing the client and his daughter

salaries but details are inaccurate or

cursory

 

Does not explain the tax effect based

on providing the client and his

daughter salaries

 

40

 

Memo: Percentage of

Ownership

 

Justifies the percentage of ownership

the client’s daughter should have

based on the business recommended

 

Justifies the percentage of ownership

the client’s daughter should have but

details are irrelevant or cursory

 

Does not justify the percentage of

ownership the client’s daughter

should have

 

40

 

Articulation of Response Submission has no major errors

related to citations, grammar,

spelling, syntax, or organization

 

Submission has major errors related

to citations, grammar, spelling,

syntax, or organization that

negatively impact readability and

articulation of main ideas

 

Submission has critical errors related

to citations, grammar, spelling,

syntax, or organization that prevent

understanding of ideas

 

20

 

Total 100%