(Solution) - Steve and Andrew write music and lyrics for popular songs -(2025 Original AI-Free Solution)

Paper Details

Steve and Andrew write music and lyrics for popular songs. Two years ago, they organized S&A Music Corporation, each brother owning one-half of its stock. Through the end of the current year, they contributed a total of $250,000 in capital to the business. The songs that Steve and Andrew write and promote have been successful. Annually, the firm earns $300,000 of royalties from the copyrights that it owns. With the aid of their aunt who operates a local bookkeeping service, Steve and Andrew organized their business as a C corporation. The brothers decide that, with the success of their music business, perhaps they should move their accounting services to an accounting firm that specializes in providing tax advice for small- and medium-sized businesses. As a staff member of this accounting firm, what advice can you provide the brothers about possible tax problems and potential tax strategies?