For problems 62 - 69, identify the tax issue(s) posed by the facts presented. Determine the

possible tax consequences of each issue that you identify.

2. For problem 107, you do not have to deal with "Pension plan the firms will adopt."

The solution must be word-processed but can be presented in any manner that is clear.

In each of the following problems , identify the tax issue ( s ) posed by the facts presentedDetermine the possible tax consequences of each issue that you identify62 . A former clergyman with a degree in counseling decides to go into business forhimself . He contracts with four large corporations to provide alcohol , drug , anpsychological analysis for their employees . The contracts require him to be available on a weekly basis to seeemployees who need help . He also contractsother organizations to provide therapy for patients in hospitals and members ofchurches and other nonprofit organizations . He anticipates that he will need twooffices and will need to hire staff to help with phone calls , appointments ,ments , and otheradministrative functions63 . Raquel is an employee of Jones Company and owns a 30% interest in the companyHer salary is $44 ,000 . She also receives a $10 001O cash distribution from JonesDuring the current year , Jones 's operating income is $1 30 09064 . Rolf owns 20% of Chaminade Corporation . During the current year , Chaninreports operaunIt's operating income of $240 000 and pays $60 090 in cash dividends65 . Miriam is a self - employed computer consultant . Her business nets $20,900 annually and she takes $85 000 of the earnings in salary Miriam is considering incorporating her computer consulting business6 6 . Robbie is the vice president of Mailer Corpooperation . He owns 40% of Mailer , whichis organized as an S corporation . Robbie's salary is $75 000 , and he receivesgroup -term life insurance and health and accident insurance that costs $3 000Mailer's operating income without considering any payments or benefits that Robie receives is $180,00067 . Rikki and Rhonda are equal owners of LilMark Corporation . To expand theoperations , Marsha will conill contribute a building worth $80 090 for which she willreceive a one third ownership interest in the corpcorporation . Marsha's basis in theuilding is $30, 00068 . Ben and Pete form a corporation to run a real estateinvestment management comBen contributes cash of $40 090 to the corporation in exchange for 50% ofIs stock . Pete obtains his 50% ownership interest by contributing land with a faimarket Value of $40 000 and a basis of $60 000 . The land has the potential to bemore valuable to the business in the future . Ben is aware of the nonrecognitionrules for contributions to corporations and wants to use the corporate form . Peterealizes that if he contributes the land , he will not be able to recognize the unrealized loss69 . Ariel and Mia agree to combine their business assets to form the ASEM corporation Ariel's business assets are worth $135 090 and have a basis of $80 000 Miabusiness assets are worth $209 000 , have a basis of $165 090 , and are encumberedby a $90 000 mortgage , which ASEM will assume . Mia will also contribute$25 000 in cash to equalize their contributions 107. William, Daniel, and Thomas are brothers who have decided to form an engineer- ' Communicationing ?rm. Although Thomas has an MBA degree and will function primarily as the - Skills?lm's ?nancial expert, he has no formal tax knowledge. William and Daniel arebringing clients from their former ?rm, but Thomas anticipates that the new?rm's client base will not be large enough to avoid a tax loss for 3 years. After year3, the ?rm's pro?ts should increase rapidly. By year 6, he anticipates that the ?rmwill generate a substantial pro?t and employ 25 people. Because Thomas isunsure whether the ?rm should operate as an S corporation, partnership, or cor-poration, he has hired your accounting ?rm to guide him. Thomas is particularly' concerned with how the form of organization would affect the I Pension plan the ?rm will adopt 0 Finn's ability to compensate current owners and employees and attract new owners or employees ' - Total tax liability of the owners - Finn's ability to distribute cash and/ or property Write a letter to Thomas explaining how the organizational form of the businessaffects each of the items he has mentioned.