I know its allot if you can please answer both parts if not please answer at least part 2.

John has created an incredibly successful wine operation in the Northeast. He has vineyard lands along the Seneca and Cayuga wine trails in the Finger Lakes of New York. Many of his wineries are considered some of the best on the East Coast, and one of them, Jennifer T was recently named winery of the year by Wine Spectator magazine. In all, there are 5 different wineries operations each in a different corporation. All 5 are in a separate S-Corporation with all the stock owned by the parent Company Petosa Vineyards Inc, also an S-Corporation. John and his wife Jennifer own 75% of the stock of the parent Company which means they own 75% of all of the value of the entities. Jennifer and John are each others second marriage. John has three children from his prior marriage and Jennifer has 2 children from her previous marriage. John and Jennifers family have been an important part of the Companys growth. Johns brother, Tom became a partner in the business providing much needed capital when the wineries were in a growth stage. Tom owns 20% of the remaining stock and he has 2 children who work at the winery on weekends doing wine tasting, but have other jobs during the week. Jennifers sister Karen owns the remaining 5% of the outstanding shares. Karen has 3 children, none of which are involved in the wine operations. However, Karen has one son, Stephen, who has an engineering degree from Georgia Tech and has been helpful in development of the winerys bio-dynamic farming operations. Stephen has expressed an interest in becoming a bigger part of the overall operations as he enjoys the laid back lifestyle the winery offers. Jennifer has been the driving force behind the winerys commitment to bio-dynamic, organic farming. She has been in charge of the vineyard operations and overall marketing. Jennifers two sons have also been very involved in the winery operations. Albert received his degree from Syracuse University in Economics and Entrepreneurship. After a few summers working as a landscaper, he learned that he loved to work the land and has been the one to implement his mothers organic farming techniques at the various vineyards. Nino graduated from Syracuse University with a degree in information studies. He has been in charge of the information systems for the wineries. He has also been responsible for the social media and other electronic marketing methods that have catapulted the growth in the companys exports to other states and overseas markets. Only Christopher, of Johns three children has been involved in the wineries. Chris, a graduate of SUs Whitman School of Management with a degree in accounting and the Syracuse College of Law, has been the CFO of the Company and the lead wine maker following in his fathers footsteps. It has been Chris adept touch and penchant for knowing just when to harvest the grapes that has been crucial to the recent accolades received by various wine rating agencies. Jay and Allyson are Johns other two children and although they come and visit the wineries frequently, they are both medical professionals and have never expressed an interest in being a part of the wine business. Of course, John has been the visionary leader that we have come to expect in a family business leader. He gave up teaching after Chris graduated from undergraduate school to concentrate on the wine business. His combination of accounting and legal knowledge, as well as his many contacts in the business world has been one of the major reasons for the winerys success. His greatest contribution however, is that of winemaker. After much trial and error, he has become one of the best wine makers in the world, owning 3 much of his success to his grandfathers teaching and the assistance of Paul Hobbs, one of the greatest wine makers ever. All the land is owned by John and Jennifer in separate LLCs. Each LLC charges the respective S-Corporations rent for the use of the land. The rent charged is usually enough to cover the cost of the real estate taxes, insurance and mortgage on the properties. However, 2 of the LLCs have loss carryforwards since they just started operations and the business end of the winery could not afford a fair market rent. The LLCs elected to be treated as partnerships. Jennifer and John have included their children as minority owners of the LLCs. Based on the information provided and our various assignments during the year, discuss in detail what the tax return would look like for the various LLCs and the winery operations that use S-Corporations. Be specific if there are any special deductions that any of the entities would be entitled to take or could take. It may be helpful to discuss the forms that each might use and how the tax returns would be compiled. If applicable, comment on any personal tax issues that may be considered due to the structure employed in this scenario. Is there a better structure to minimize the tax situation of the entire wine operation?

Part 2

Using the information provided in questions one and two consider the following additional information. In conjunction with the succession plan that is being created in question 2, John and Jennifer Petosa face the difficult question of planning for their demise. Despite Johns vast knowledge in the field of Estate planning, he has come to you as the families most trusted advisor to create an estate plan that would express their wishes. John and Jennifer have been incredibly successful and they wish to be fair to all of their children and grandchildren. They also have an affinity for certain charities and wish that charitable giving be a big part of their overall estate plan. The couple has the following joint assets: Petosa Estate Plan Personal Financial Statement 12/31/2030 Cash $350,000 Stocks, Bonds other Securities 3,500,000 Retirement Funds 1,650,000 Florida Home 750,000 New York Home 450,000 Napa Valley Home 825,000 Stock in Closely Held Businesses Petosa Vineyards Inc. 75% 15,000,000 Petosa Wine Lands Inc. 100% 7,500,000 Total Assets $30,025,000 ========= Liabilities Mortgage on Napa Home $600,000 Equity 29,425,000 Total Liabilities and Equity $30,025,000 ========= You should note that John intentionally put the vineyard land in separate corporations under the parent Petosa Wine lands Inc., in the event that he wanted to sell off a piece of the property to an interested party. Each of the Petosa Vineyards Corporations and subsidiaries pays rent to the Petosa Wine Lands Corporation as a way to reduce taxes, further insulate the owners from liability and balance out the earnings. None of the corporations pays excessive rent compared to the marketplace. 5 In addition, John and Jennifer set up a life insurance trust for $5,000,000 with a second to die term life insurance policy. Their 5 children are the beneficiaries of the insurance trust and have executed their crummy notices each year so that the trust is valid and the gifts made were present interests for tax purposes. The trust has a pour over provision which allows it to purchase assets from the estate of the last to die to provide liquidity to pay some or all of the estate tax that may be due. Any assets of the trust after this purchase from the estate are to be distributed to their children in equal shares per stirpes. Further, John and Jennifer have been big proponents of ice sports. They wish to foster the mens club hockey program and the womans synchronized skating programs at Syracuse University. They wish to leave a legacy to help future hockey players and synchronized skaters enjoy the riches that a Syracuse University education provides coupled with maturation that participation in an athletics can afford a young person. As such they wish to provide $5,000,000 to build a new ice hockey arena called the Petosa Pavilion on South Campus. Lastly, the couple wants to provide for their retirement. For being so successful, John and Jennifer live fairly modestly. They anticipate that they need a net of $350,000 per year to pay their bills and maintain their lifestyle. They do anticipate a bit more travel between their 3 homes. Presently, John has collected a salary of $200,000 as the CEO and Jennifer has collected a salary of $250,000 as the President and Chief Marketing officer. They have paid their children who are involved in the business well but not above the market rate for the work that they perform. For any of their children or grandchildren not involved in the business they have made gifts of $28,000 per year as allowed by the gift tax laws without having to file a gift tax return. This amount seems to have kept the playing field level and equal. Please provide an Estate plan that would accomplish the goals of John and Jennifers retirement, charitable bequest, and lower their overall estate cost while passing their total estate equally to their children while being fair to those who are involved in the business