My spouse and I currently work for separate companies with a joint
annual income of about $170k. A year ago, I started consulting for an
attorney (on the side) strictly on a contingency basis. I provided him
very extensive detailed engineering analysis and advice on the basis
of which he has managed to get a settlement, of which his firm gets
paid $1.2M. He expects to receive the money in a few weeks and has
alerted me to get ready to receive my 33%. My expenses for the work
done are less than $5K. My question is: what is the best way to accept
the money, the goal being that I keep as much of the money as possible
legally. Receiving money as an individual will result in very high
taxes. I can quickly set up a corporation to receive the money, but I
don't know exactly what kind of corporation, etc. I don't really need
to spend any part of the $400k for a few years. We live in California
at present. I don't have any major tax deductions at present since we
have no debts. What are some good options? I expect not to retire at
55
in about 4 years, so I would like to start spending the $400k then, at
a rate of about $50k per year. Please share your tax wisdom with me
and give me as specific advice as you can. Thanks.