WeWork, maximum 2.5 points, default grade for good work 2.1, due 11/4

"One person emerges in good shape. Mr. Neumann is getting a $185 million four-year consulting contract and can sell up to $970 million of his shares to SoftBank."

-- "The Fall of WeWork: How a Startup Darling Came Unglued" by Maureen Farrell, Liz Hoffman, Eliot Brown and David Benoit, The Wall Street Journal, Oct. 24, 2019. https://www.wsj.com/articles/the-fall-of-wework-how-a-startup-darling-came-unglued-11571946003

(If the link above does not work, please try this one: https://www.dropbox.com/s/a01a2oz12gq2or8/The%20Fall%20of%20WeWork_%20How%20a%20Startup%20Darling%20Came%20Unglued%20-%20WSJ.pdf?dl=0 )

My philosophy is to try to integrate tax knowledge with general business knowledge and world event.This is a fascinating and somewhat tragic story of business success and failure.I hope you find the article interesting.

Assume that Neumann is married, has no other income, his basis in his SoftBank shares is $1 million, representing an investment that took place more than one year ago, and that the payments above are averaged over four years.That is, the first-year consulting payment is $46.25 million, and he will sell $242.5 million of WeWork stock in the first year.Focus only on ordinary income, and capital gains.Remember to take the standardized deduction, even though it is jokingly small compared to the large figures discussed.Ignore the alternative minimum tax.My motivation for assigning this exercise if MC Property question 21 (copied below)

1.Using 2018 tax rates, calculate Mr. and Mrs. Neumann's tax liability for 2018 (assume that the first year of payments is 2018 rather than 2019).You must clearly show your calculations and tables used.

2.Comment on any insight you gained into question 21 after doing this assignment.