Chapter 1

2. The compensation committee of a large public corporation engages you to help design a tax-efficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportunity to meet with the CEO to discuss her personal financial and tax situation. A member of the compensation committee questions why you would want to meet with the CEO. Prepare a response to this question.

4. The ABC Corporation is a large multinational company that has facilities (both manufacturing and distribution) located in many U.S. states and in overseas countries. The firm?s long-serving chief financial officer (CFO) just retired and his replacement is reviewing the firm?s economic balance sheet. She discovers that the firm leases many of its distribution facilities and relies heavily on long-term debt for financing. She vaguely recalls having heard about implicit taxes and tax clienteles and would like these concepts explained and then applied to her observations to determine if the firm is bearing implicit taxes and whether the firm is in the right clientele.

Chapter 2

6. The CEO of ABC Corporation is a dog lover. He and his spouse like cocker spaniels and have a purebred male cocker spaniel. Because of their love for dogs, they decide to breed and sell cocker spaniel pups. In the first year, they spend $25,000 building some kennels, $5,000 on veterinarian fees, $5,000 buying breeding females, and $1,000 on food and sundry supplies. By the end of the first year, they have successfully produced their first litters but have not yet sold any puppies. They would like to deduct their losses (which they calculate by simply summing all their expenditures, a total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer?s other income.

a. Why might Congress distinguish between hobby activities and trade or business activities?

b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test).

c. Would the CEO?s dog-breeding activity be classified as a hobby or business under your rules?

d. Refer to one of the sources listed in Appendix 2.1 to ascertain the IRC rules for classification. Would the CEO?s dog-breeding activity be classified as a hobby or business under IRC rules?

e. If the dog-breeding activity was classified as a business, how much would the CEO be allowed to deduct against his other income?

Please answer the questions in the problem answer sheet excel file attached.

Chapter 1 2. The compensation committee of a large public corporation engages you to help design a taxefficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportunity to meet with the CEO to discuss her personal financial and tax situation. A member of the compensation committee questions why you would want to meet with the CEO. Prepare a response to this question. 4. The ABC Corporation is a large multinational company that has facilities (both manufacturing and distribution) located in many U.S. states and in overseas countries. The firm's long-serving chief financial officer (CFO) just retired and his replacement is reviewing the firm's economic balance sheet. She discovers that the firm leases many of its distribution facilities and relies heavily on long-term debt for financing. She vaguely recalls having heard about implicit taxes and tax clienteles and would like these concepts explained and then applied to her observations to determine if the firm is bearing implicit taxes and whether the firm is in the right clientele. Chapter 2 6. The CEO of ABC Corporation is a dog lover. He and his spouse like cocker spaniels and have a purebred male cocker spaniel. Because of their love for dogs, they decide to breed and sell cocker spaniel pups. In the first year, they spend $25,000 building some kennels, $5,000 on veterinarian fees, $5,000 buying breeding females, and $1,000 on food and sundry supplies. By the end of the first year, they have successfully produced their first litters but have not yet sold any puppies. They would like to deduct their losses (which they calculate by simply summing all their expenditures, a total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? d. Refer to one of the sources listed in Appendix 2.1 to ascertain the IRC rules for classification. Would the CEO's dog-breeding activity be classified as a hobby or business under IRC rules? e. If the dog-breeding activity was classified as a business, how much would the CEO be allowed to deduct against his other income? Type your name here------> Points earned --> 50 Read the instructions and hints before attempting to complete the solution. Enter your responses and answers in the areas specified. There are 50 total points for this assignment. The point value of each problem is determined by dividing the 50 points by the number of exercises are per assignment. If you have difficulty with any of the problems, take advantage of the collaboration discussion forum. Workshop 1 1 Introduction to tax strategy 2, 4 2 Tax planning fundamentals 6 Chapter 1 Problem 2 points possible 16 deductions Points earned 16 2. The compensation committee of a large public corporation engages you to help design a tax-efficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportunity to meet with the CEO to discuss her personal financial and tax situation. A member of the compensation committee questions why you would want to meet with the CEO. Prepare a response to this question. type your response here. Keep in mind we are helping the CEO with tax planning. You can also search the web for suggestions. Problem 4 points possible 17 deductions Points earned 17 4. The ABC Corporation is a large multinational company that has facilities (both manufacturing and distribution) located in many U.S. states and in overseas countries. The firm's long-serving chief financial officer (CFO) just retired and his replacement is reviewing the firm's economic balance sheet. She discovers that the firm leases many of its distribution facilities and relies heavily on long-term debt for financing. She vaguely recalls having heard about implicit taxes and tax clienteles and would like these concepts explained and then applied to her observations to determine if the firm is bearing implicit taxes and whether the firm is in the right clientele. What are tax clienteles? Why use long term debt - what is the tax advantage and why? How are implicit taxes related to deprecation? Should a low tax firm have long term debt? why or why not? To lease or not to lease that is the question. type your response here. Chapter 2 Problem 6 points possible 17 deductions Points earned 17 6. The CEO of ABC Corporation is a dog lover. He and his spouse like cocker spaniels and have a purebred male cocker spaniel. Because of their love for dogs, they decide to breed and sell cocker spaniel pups. In the first year, they spend $25,000 building some kennels, $5,000 on veterinarian fees, $5,000 buying breeding females, and $1,000 on food and sundry supplies. By the end of the first year, they have successfully produced their first litters but have not yet sold any puppies. They would like to deduct their losses (which they calculate by simply summing all their expenditures, a total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? d. Refer to one of the sources listed in Appendix 2.1 to ascertain the IRC rules for classification. Would the CEO's dog-breeding activity be classified as a hobby or business under IRC rules? e. If the dog-breeding activity was classified as a business, how much would the CEO be allowed to deduct against his other income? type your responses in the designated text boxes below a. Differenitate between a hobby and a business activity. What was Congress's intent and why? b. List 4 - 5 criteria that would show a business intent. c. Did they keept records? d. See Treasury Regulation 183-2(b). See Treasury Regulation 183-2(b). e. Cite 3 types of expenses and note if they are captial (deprecitation) or current. esponses and ned by dividing the ssion forum. esign a tax-efficient rview with the uss her personal with the CEO. ou can also search nufacturing and rving chief mic balance sheet. on long-term debt e these concepts mplicit taxes and hy? How are implicit y not? To lease or and have a purebred ker spaniel pups. In s, $5,000 buying ar, they have eir expenditures, a der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? ssification. Would O be allowed to t and why? Type your name here------> Points earned --> 50 Read the instructions and hints before attempting to complete the solution. Enter your responses and answers in the areas specified. There are 50 total points for this assignment. The point value of each problem is determined by dividing the 50 points by the number of exercises are per assignment. If you have difficulty with any of the problems, take advantage of the collaboration discussion forum. Workshop 1 1 Introduction to tax strategy 2, 4 2 Tax planning fundamentals 6 Chapter 1 Problem 2 points possible 16 deductions Points earned 16 2. The compensation committee of a large public corporation engages you to help design a tax-efficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportunity to meet with the CEO to discuss her personal financial and tax situation. A member of the compensation committee questions why you would want to meet with the CEO. Prepare a response to this question. type your response here. Keep in mind we are helping the CEO with tax planning. You can also search the web for suggestions. Problem 4 points possible 17 deductions Points earned 17 4. The ABC Corporation is a large multinational company that has facilities (both manufacturing and distribution) located in many U.S. states and in overseas countries. The firm's long-serving chief financial officer (CFO) just retired and his replacement is reviewing the firm's economic balance sheet. She discovers that the firm leases many of its distribution facilities and relies heavily on long-term debt for financing. She vaguely recalls having heard about implicit taxes and tax clienteles and would like these concepts explained and then applied to her observations to determine if the firm is bearing implicit taxes and whether the firm is in the right clientele. What are tax clienteles? Why use long term debt - what is the tax advantage and why? How are implicit taxes related to deprecation? Should a low tax firm have long term debt? why or why not? To lease or not to lease that is the question. type your response here. Chapter 2 Problem 6 points possible 17 deductions Points earned 17 6. The CEO of ABC Corporation is a dog lover. He and his spouse like cocker spaniels and have a purebred male cocker spaniel. Because of their love for dogs, they decide to breed and sell cocker spaniel pups. In the first year, they spend $25,000 building some kennels, $5,000 on veterinarian fees, $5,000 buying breeding females, and $1,000 on food and sundry supplies. By the end of the first year, they have successfully produced their first litters but have not yet sold any puppies. They would like to deduct their losses (which they calculate by simply summing all their expenditures, a total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? d. Refer to one of the sources listed in Appendix 2.1 to ascertain the IRC rules for classification. Would the CEO's dog-breeding activity be classified as a hobby or business under IRC rules? e. If the dog-breeding activity was classified as a business, how much would the CEO be allowed to deduct against his other income? type your responses in the designated text boxes below a. Differenitate between a hobby and a business activity. What was Congress's intent and why? b. List 4 - 5 criteria that would show a business intent. c. Did they keept records? d. See Treasury Regulation 183-2(b). See Treasury Regulation 183-2(b). e. Cite 3 types of expenses and note if they are captial (deprecitation) or current. esponses and ned by dividing the ssion forum. esign a tax-efficient rview with the uss her personal with the CEO. ou can also search nufacturing and rving chief mic balance sheet. on long-term debt e these concepts mplicit taxes and hy? How are implicit y not? To lease or and have a purebred ker spaniel pups. In s, $5,000 buying ar, they have eir expenditures, a der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? ssification. Would O be allowed to t and why? Type your name here------> Points earned --> 50 Read the instructions and hints before attempting to complete the solution. Enter your responses and answers in the areas specified. There are 50 total points for this assignment. The point value of each problem is determined by dividing the 50 points by the number of exercises are per assignment. If you have difficulty with any of the problems, take advantage of the collaboration discussion forum. Workshop 1 1 Introduction to tax strategy 2, 4 2 Tax planning fundamentals 6 Chapter 1 Problem 2 points possible 16 deductions Points earned 16 2. The compensation committee of a large public corporation engages you to help design a tax-efficient compensation plan for the current chief executive officer (CEO). In a preliminary interview with the compensation committee, you ask for the opportunity to meet with the CEO to discuss her personal financial and tax situation. A member of the compensation committee questions why you would want to meet with the CEO. Prepare a response to this question. type your response here. Keep in mind we are helping the CEO with tax planning. You can also search the web for suggestions. Problem 4 points possible 17 deductions Points earned 17 4. The ABC Corporation is a large multinational company that has facilities (both manufacturing and distribution) located in many U.S. states and in overseas countries. The firm's long-serving chief financial officer (CFO) just retired and his replacement is reviewing the firm's economic balance sheet. She discovers that the firm leases many of its distribution facilities and relies heavily on long-term debt for financing. She vaguely recalls having heard about implicit taxes and tax clienteles and would like these concepts explained and then applied to her observations to determine if the firm is bearing implicit taxes and whether the firm is in the right clientele. What are tax clienteles? Why use long term debt - what is the tax advantage and why? How are implicit taxes related to deprecation? Should a low tax firm have long term debt? why or why not? To lease or not to lease that is the question. type your response here. Chapter 2 Problem 6 points possible 17 deductions Points earned 17 6. The CEO of ABC Corporation is a dog lover. He and his spouse like cocker spaniels and have a purebred male cocker spaniel. Because of their love for dogs, they decide to breed and sell cocker spaniel pups. In the first year, they spend $25,000 building some kennels, $5,000 on veterinarian fees, $5,000 buying breeding females, and $1,000 on food and sundry supplies. By the end of the first year, they have successfully produced their first litters but have not yet sold any puppies. They would like to deduct their losses (which they calculate by simply summing all their expenditures, a total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? total of $36,000), but they have heard something about hobby-activity loss rules. Under the IRC, for activities classified as hobbies, only losses up to any income generated by the activity can be deducted. If, however, the activity is classified as a trade or business, and the taxpayer is actively engaged in the business, the losses are deductible against the taxpayer's other income. a. Why might Congress distinguish between hobby activities and trade or business activities? b. If you were writing the tax code, what rules (or tests) would you write to distinguish an activity as a hobby versus a trade or business? Explain the purpose of each rule (or test). c. Would the CEO's dog-breeding activity be classified as a hobby or business under your rules? d. Refer to one of the sources listed in Appendix 2.1 to ascertain the IRC rules for classification. Would the CEO's dog-breeding activity be classified as a hobby or business under IRC rules? e. If the dog-breeding activity was classified as a business, how much would the CEO be allowed to deduct against his other income? type your responses in the designated text boxes below a. Differenitate between a hobby and a business activity. What was Congress's intent and why? b. List 4 - 5 criteria that would show a business intent. c. Did they keept records? d. See Treasury Regulation 183-2(b). See Treasury Regulation 183-2(b). e. Cite 3 types of expenses and note if they are captial (deprecitation) or current. esponses and ned by dividing the ssion forum. esign a tax-efficient rview with the uss her personal with the CEO. ou can also search nufacturing and rving chief mic balance sheet. on long-term debt e these concepts mplicit taxes and hy? How are implicit y not? To lease or and have a purebred ker spaniel pups. In s, $5,000 buying ar, they have eir expenditures, a der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? der the IRC, for y can be deducted. y engaged in the ctivities? sh an activity as a your rules? ssification. Would O be allowed to t and why