Question from Jack, How are Business Expenses Deducted in Claims for Lost Earnings and Lost Earning Capacity for a Partner in an LLC?
Answer from AI:
When a partner in a Limited Liability Company (LLC) is claiming lost earnings and lost earning capacity in a personal injury case, the calculation of these losses can be complex. It’s important to understand that the calculation of lost earnings and lost earning capacity is different from a lost profits claim or an employment claim.
Understanding Lost Earnings and Lost Earning Capacity
Lost earnings refer to the income that the injured party would have earned from the date of the injury to the date of the settlement or judgment. Lost earning capacity, on the other hand, refers to the reduction in the injured party’s ability to earn income in the future due to the injury.
Deducting Business Expenses
In general, when calculating lost earnings and lost earning capacity, business expenses are typically deducted. This is because these expenses would have been incurred if the injured party had been able to continue working. However, the specific expenses that are deducted can vary depending on the circumstances of the case.
Relevant Laws and Regulations
The California Civil Jury Instructions (CACI) 3903C “Past and Future Lost Earnings” and CACI 3903D “Lost Earning Capacity” provide guidance on how to calculate these losses. According to these instructions, the calculation should take into account factors such as the injured party’s earning capacity, the likelihood that the injured party would have continued working, and the potential for future increases in earnings.
Consulting with a Legal Professional
Given the complexity of these calculations, it’s recommended that individuals consult with a legal professional for personalized advice. A lawyer can help determine which business expenses should be deducted and how to calculate lost earnings and lost earning capacity.
Resources
Please note: This information is intended to provide a general understanding of the law. It should not be construed as legal advice. For advice tailored to your specific situation, please consult with a legal professional.
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Disclaimer: The information provided in this response is intended for general informational purposes only and should not be considered as legal advice. While we strive to provide accurate information, we make no guarantees regarding the accuracy or legal validity of the information presented. Laws and regulations vary by jurisdiction and can change over time, and the application of laws can vary widely based on the specific facts and circumstances involved. Therefore, you should consult with a qualified legal professional before making any decisions related to legal matters. Do not rely solely on the information provided in this response for any legal decisions. We disclaim any and all liability with respect to actions taken or not taken based on the contents of this response.
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