NORTHEASTERN UNIVERSITY-College of Professional Studies

NORTHEASTERN UNIVERSITY-College of Professional Studies
DUE DATE: MAY 16, 2012

PART A.) STUDY THE COMPREHENSIVE CUMULATIVE INDIVIDUAL TAX PROBLEM INTHE TEXTBOOK, PROBLEM 6-58 PART I ONLY.REQUIRED:
a)CALCULATE H AND W'S 2010 FEDERAL INCOME TAX LIABILITY OR TAX REFUNDASSUMING THEY FILE A 2010 JOINT TAX RETURN.b)HOW WOULD YOUR SOLUTION DIFFER IF YOU PREPARED AND FILED A 2011 JOINTTAX RETURN?(125 POINTS)

PART B.) R, S T AND E, WHO ALL RESIDE IN THE UNITED STATES, ARE CONSIDERINGTHE FORMATION OF A NEW IMPORT-EXPORT BUSINESS IN THE U.S. R AND S ARESINGAPORE CITIZENS AND T AND E ARE U.S. CITIZENS. E OWNS NYC LAND WITH ABASIS OF $250,000 AND A WHOLESALE STORAGE WAREHOUSE ON THE LAND WITH ABASIS OF $1,000,000. THE FAIR MARKET VALUE OF THE LAND AND BUILDING ISESTIMATED TO BE $2,500,000. S HAS SPECIFIC MANAGEMENT EXPERIENCE IN THISPARTICULAR SEGMENT OF THE COMPONENT BUSINESS. R AND S HAVE CONTACTSWITH SINGAPORE MANUFACTURERS TO EXPORT ELECTRONICS AND OTHERCOMPUTER TECHNOLOGY COMPONENTS AND FINISHED PRODUCTS TO THE U.S.THEY ALSO HAVE DEVELOPED BUSINESS RELATIONSHIPS AND ACCESS TOGOVERNMENT OFFICIALS TO EXPEDITE THE EXPORT LICENSING PROCESS.http://www.ukthesis.org/thesis_sample/ THEY HAVE ALL AGREED TO INVEST AND OWN EQUAL INTERESTS, EXCEPT FOR THEFOLLOWING:
i)R IS SEEKING ADDITIONAL COMPENSATION BECAUSE HE POSSESSES TRADESECRETS AND KNOWHOW TO PRODUCE THE COMPONENTS MORE EFFICIENTLY INSINGAPORE, INCLUDING BUSINESS RELATIONSHIPS AND ACCESS TO TECHNICALAND PROFESSIONAL LABOR SUPPLIERS.
ii)T IS SEEKING ADDITIONAL COMPENSATION BECAUSE SHE POSSESSES UNIQUERELATIONSHIPS WITH THE U.S. MANUFACTURERS WHO ARE THE TARGET BUYERSFOR THESE GOODS INCLUDING POTENTIAL CUSTOMER LISTS THAT SHE OBTAINEDWHILE EMPLOYED AS AN EXECUTIVE FOR A U.S. MANUFACTURER.

REQUIRED:
a)THEY SEEK YOUR ADVICE AND COUNSEL IN DECIDING UPON THE PREFERREDSTRUCTURE OF THE BUSINESS VENTURE FOR TAX AND LEGAL PURPOSES, THAT IS,WHETHER TO FORM A U.S. CORPORATION, U.S. PARTNERSHIP OR A U.S. "S"CORPORATION, ASSUMING THEY ALL RESIDE IN THE UNITED STATES.b)HOW WOULD YOUR PROPOSAL CHANGE IF R AND S RESIDE AND ARE DOMICILEDIN SINGAPORE?c)WHAT WOULD THE BALANCE SHEET OF THE ENTITY LOOK LIKE ON THE FIRSTDAY OF FORMATION FOR TAX PURPOSES AND HOW WOULD IT DIFFER FORFINANCIAL STATEMENT PURPOSES?YOUR PROPOSAL SHOULD CAREFULLY COMPARE ALL ALTERNATIVES AND ASSESSTHE ADVANTAGES AND DISADVANTAGES OF EACH OWNERSHIP FORM ADDRESSINGITEMS a), b) and c).(125 POINTS)