The Peppermint Partnership operates a successful candy business. It is considering taking the partnership public and becoming a master limited partnership. If it does so, will it be subject to the corporate franchise tax in New York, where its headquarters and operating plant are located?
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- If you were going to start a business with a few of your closest friends (or family), would you choose to form a partnership? Why or why not? Discuss tax planning opportunities utilizing a partnership structure. You can comment on advantages and disadvantages of forming a partnership.which type of organization should be formed. Rob and Bran want to form a snow removal business. They are deciding between a general partnership and a limited liability company. Bran says it is important that the two have limited liability and do not pay corporate income taxes.Evelyn, Francis and George, run a business buying and selling wigs. They have been advised by their lawyer to form a private limited company to run the business. They have contacted you for a second opinion, particularly in respect of: a. The extent to which their liability will be limited; b. Wether they will be able to exercise the same control over the private company as they did with the partnership. c. The extend to which they will have the same right to be involved in the management of the private limited company; and d. The public disclosure to which the business would be subjected to as a private company
- Two people want to form a partnership and want to transfer business assets into the partnership. They are afraid of tax issues with the transfer what do you tell them?Which of the following statements is most true? a. The liability for other partners’ wrong doings is limited to the amount a particular partner has invested in the partnership. b. Partnerships are formed in accordance with specific guidelines that include the filing of a formal written agreement to the government. c. A fast growing firm would be more probable to establish a partnership as its business form than would a slow growing firm. d.Corporations can easier attract investors than those of the partnership and sole proprietor businesses.Edward Seymour is a financial consultant to Cornish Inc., a real estate syndicate. Cornish Inc. finances and develops commercial real estate (office buildings). The completed projects are then sold as limited partnership interest to individual investors. The syndicate makes a profit on the sale of these partnership interests. Edward provides financial information for the offering projects, which is a document that provides the financial and legal details of the limited partnership offerings. In one of the projects, the bank has financed the construction of a commercial office building at a rate of 10% for the first four years, after which time the rate jumps to 15% of the mortgage. The interest costs are one of the major ongoing costs of a real estate project. Edward has reported prominently in the prospectus that the break-even occupancy for the first four years is 65%. This is the amount of office space that must be leased to cover and general upkeep costs over the first four…
- Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob O’Donnell, a local merchant, to contribute the capital to form a partnership. On January 1, 2022, O’Donnell invests a building worth $54,000 and equipment valued at $20,000 as well as $16,000 in cash. Although Reese makes no tangible contribution to the partnership, he will operate the business and be an equal partner in the beginning capital balances. To entice O’Donnell to join this partnership, Reese draws up the following profit and loss agreement: O’Donnell will be credited annually with interest equal to 10 percent of the beginning capital balance for the year. O’Donnell will also have added to his capital account 10 percent of partnership income each year (without regard for the preceding interest figure) or $5,000, whichever is larger. All remaining income is credited to Reese. Neither partner is allowed to withdraw funds from the partnership during 2022.…Which of the following statements is always true regarding accounting methods available to a partnership? A) If a partnership has a partner that is a personal service corporation, it cannot use the cash method. B) If a partnership is a tax shelter, it can use the cash method of accounting. C) If a partnership has a partner that is a C corporation, it cannot use the cash method. D) If a nontax-shelter partnership had average annual gross receipts of less than $26,000,000 (2021) for the last three tax years, it can use the cash method.Sam wants to help his brother, Lou, start a new business. Lou isan auto mechanic but has little business sense, so he needs Sam to help him make business decisions. Should this partnership be arranged as a general partnership or a limited partnership? Why? Should they consider any other form for structuring their business? In your post, only discuss the partnership entity options, do not discuss other business types such as S-corporations.
- Jim Bond, a plumber, has been working for Fleming’s Plumbing Supplies for several years. Based on his hard work and the fact that he recently married Ivan Fleming’s daughter, Jim has been invited to enter into a partnership with Fleming. The new partnership will be called Fleming and Bond’s Plumbing Supplies. The terms of the partnership are as follows: a) Fleming will invest the assets of Fleming’s Plumbing Supplies, and the partnership will assume all liabilities. The market values of the office and store equipment are estimated to be $18,000 and $8,000, respectively. All other values reported on the balance sheet are reasonable approximations of market values. Fleming has no knowledge of any uncollectible accounts receivable. b) Bond will invest $50,000 cash. c) Fleming will draw a salary allowance of $50,000 per year, and Bond will receive $30,000. d) Each partner will receive 10% interest on the January 1 balance of his capital account. e) Profits or losses remaining after…Write an e-mail to a client describing situations in which the partnership entity form might be more advantageous (or disadvantageous) than operating as a C corporation. Use subheadings and bullet points to highlight your major thoughts. You may use the following as a template: Dear Mr./Miss Jones, I am in receipt of your question(s) about the advantages or disadvantages of operating an entity (for tax purposes) either as a partnership or a C-Corporation. I will bullet my points below for clarity. Then you may end the email in any professional way you feel appropriate.Robert is the CEO of a closely held business, and he would like to provide life insurance to all of his employees as a fringe benefit. Robert would like life insurance that permits him to pay the premium, so long as it is deductible as a business expense and permits the employee to designate the beneficiary of the policy. Which one of the following is the most appropriate insurance product for Robert's situation? A)Robert should enter into an entity buy-sell agreement with each employee using cash value life insurance. B)Robert should provide group term life insurance. C)Robert should provide key person life insurance. D)Robert should provide split-dollar life insurance.