Alfred Is a Consultant for Data Planners

question 28

Multiple Choice

Alfred is a consultant for Data Planners. In an effort to minimize his tax liability he enters into a legal contract transferring 25% of the fees from a new consulting contract to his son Ken, who is 42, and owns a pest control business. Which of the following statements concerning the transaction is correct?
I.The assignment-of-income doctrine prevents Alfred from transferring taxation of the income to his son.
II.The assignment-of- income doctrine does not apply because the transfer is supported by a legal contract.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct
• D)Neither statement is correct.

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Definitions:

Judgment

The ability to make considered decisions or come to sensible conclusions.

Women

Female human beings, often referred to in contexts relating to gender-specific health, rights, or societal roles.

Body Language

Non-verbal communication through gestures, facial expressions, behaviors, and postures.

Communication

The act of transferring information from one place, person, or group to another, through speaking, writing, or using some other medium.