You are working as an accountant at a mid-size CPA firm. One of your clients is Bob Jones. Bob?s personal information is as follows:

DOB: October 10, 1952 SSN: 444-00-4444 Marital Status: Single Home Address: 5100 Lakeshore Drive, Pensacola, FL 32502

Bob has a very successful used car business located at 210 Ocean View Drive in Pensacola, Florida. Last year, you filed a Schedule C for Bob that had $1,200,000 in taxable income. The business will have an income growth rate of 10% per year over the next several years. Bob?s personal wealth, including investments in land, stocks, and bonds, is about $14,000,000.

Last year, he reported interest income of $20,000 and dividend income of $6,000. The $14,000,000 includes land worth $9,000,000 that Bob bought in 1966 for $450,000. The stocks and bonds have a tax basis of $1,200,000 and they are currently worth $5,000,000. All of the investments have been owned for more than a year. In addition to his investments, Bob paid $140,000 for his home in 1972 and it is now worth $600,000.

The used car business is currently valued at $53,000,000 including the land and building, which are worth $41,000,000. Bob?s tax basis in the land and building is $2,000,000 and $400,000, respectively. The inventory is worth $12,000,000, with a cost basis of $5,000,000; the remaining assets, which include office furniture and equipment, make up the remainder of the business?s total value. The office furniture and equipment are fully depreciated.

Bob wants your professional advice regarding whether he should continue to operate as a sole proprietor or convert the business to a partnership, an S corporation, or a C corporation. Based on one of the business entities selected, Bob wants to include Mandy?his daughter?in the business as an owner and manager with a possibility of 40% interest. One of his concerns is what would happen to his business after he passes away.

Mandy?s personal tax information is as follows:

Mandy Jones DOB: June 30, 1990 SSN: 999-99-9999 Marital Status: Single Home Address: 5990 Langley Road, Pensacola, FL 35203

You will need to describe the tax and limited liability effects on a chosen business entity should Bob decide to reduce the amount of tax paid per year, as well as the protection of personal assets should there be a possible claim against the company?s assets.

***Need help with attached document for the above prompt***

TAX 655 Milestone Two Guidelines and Rubric 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. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Memo: Tax Effect on Cash Withdrawals or Dividends Memo: Percentage of Ownership Articulation of Response Proficient (100%) Explains the tax effect based on providing the client and his daughter salaries if they withdraw cash from the company or pay dividends Justifies the percentage of ownership the client's daughter should have based on the business recommended Submission has no major errors related to citations, grammar, spelling, syntax, or organization Needs Improvement (75%) Explains the tax effect based on providing the client and his daughter salaries but details are inaccurate or cursory Justifies the percentage of ownership the client's daughter should have but details are irrelevant or cursory Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Not Evident (0%) Does not explain the tax effect based on providing the client and his daughter salaries Value 40 Does not justify the percentage of ownership the client's daughter should have Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 40 Total 20 100% TAX 655 Milestone Two Guidelines and Rubric 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. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Memo: Tax Effect on Cash Withdrawals or Dividends Memo: Percentage of Ownership Articulation of Response Proficient (100%) Explains the tax effect based on providing the client and his daughter salaries if they withdraw cash from the company or pay dividends Justifies the percentage of ownership the client's daughter should have based on the business recommended Submission has no major errors related to citations, grammar, spelling, syntax, or organization Needs Improvement (75%) Explains the tax effect based on providing the client and his daughter salaries but details are inaccurate or cursory Justifies the percentage of ownership the client's daughter should have but details are irrelevant or cursory Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Not Evident (0%) Does not explain the tax effect based on providing the client and his daughter salaries Value 40 Does not justify the percentage of ownership the client's daughter should have Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 40 Total 20 100% TAX 655 Milestone Two Guidelines and Rubric 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. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Memo: Tax Effect on Cash Withdrawals or Dividends Memo: Percentage of Ownership Articulation of Response Proficient (100%) Explains the tax effect based on providing the client and his daughter salaries if they withdraw cash from the company or pay dividends Justifies the percentage of ownership the client's daughter should have based on the business recommended Submission has no major errors related to citations, grammar, spelling, syntax, or organization Needs Improvement (75%) Explains the tax effect based on providing the client and his daughter salaries but details are inaccurate or cursory Justifies the percentage of ownership the client's daughter should have but details are irrelevant or cursory Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Not Evident (0%) Does not explain the tax effect based on providing the client and his daughter salaries Value 40 Does not justify the percentage of ownership the client's daughter should have Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 40 Total 20 100%