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.

Prepare a memorandum to the client, recommending a type of business entity, including an appendix of supporting IRS tax schedules and forms.

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

TAX 655 Milestone One Guidelines and Rubric You will submit a draft of your recommendation for the business entity that you believe will meet the client's needs, based on your research. You will also select the accounting method that should be used to interpret the business transactions and for tax reporting. You will also summarize the tax law pertaining to the entity selected. This assignment will address Section I, Parts A, B, and C of the critical elements of the final project. Specifically, the following critical elements must be addressed: I. Memorandum A. Use logical reasoning based on your tax research to explain why the client should choose your recommended business entity. Consider referencing appropriate tax code and regulations. B. Defend your business entity recommendation by describing the accounting method. Consider the advantages and disadvantages of the business entity based on the following: 1. Cash basis vs. accrual 2. The cost to prep the returns 3. The tax benefits 4. The limited liability protection 5. Employee benefits C. Interpret the tax law pertaining to the type of business recommended and justify your recommendation using details consistent with tax law, code, and regulations. Guidelines for Submission: Your paper must be submitted as a 1-2-page Microsoft Word document with double spacing, 12-point Times New Roman font, oneinch 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: Business Entity Memo: Accounting Method Proficient (100%) Explains why the recommended entity is the most appropriate choice using logical reasoning Defends the decision to choose the recommended entity by describing the accounting method Needs Improvement (75%) Explains why the recommended entity is the most appropriate choice but details either lack relevance or are cursory Defends the decision to choose the recommended entity but details are inaccurate or cursory Not Evident (0%) Does not explain why the recommended entity is the most appropriate choice Value 25 Does not defend the decision to choose the recommended entity 25 Memo: Tax Law Articulation of Response Interprets tax law pertaining to the selected business entity using tax law, code, and regulations as justification Submission has no major errors related to citations, grammar, spelling, syntax, or organization Interprets and justifies tax law pertaining to the selected business entity but details are either inaccurate or irrelevant Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Does not interpret and justify tax law pertaining to the selected business entity 25 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 25 Total 100%