Accounting homework help

Dec 13th, 2014
Price: $15 USD

Question description

Mike and Rita are two partners in a retail distribution management business. They each contributed 50% of seed capital to...

  • Mike and Rita are two partners in a retail distribution management business. They each contributed 50% of seed capital to start the partnership, M&R company. The entity was set up in Oklahoma in 2008, and has been profitable since its inception. In 2009, Mike moved his family to Costa Rica, while Rita moved to California.

    For the entire years of 2010 through 2014, Mike resided in Costa Rica, enjoying the international living. He traveled every month to the US on business, either for trade shows or client meetings. Mike has decided to stay in Costa Rica for a long term. He also has a daughter at 12, from his previous marriage, who lives in OK with her mother.

    The business is doing well despite the global recession and uncertainty. It is projected that the net earnings of the business will be in $300K in 2014. For the past two years, Mike devoted majority of time to the business among the partners. The split between Mike and Rita is roughly 75% / 25%. This contribution will likely continue as most of the operation is located in Costa Rica.

    Mike is now contemplating setting up another legal entity in Costa Rica, which likely will be a stand-alone entity from the existing entity, M&R.

    What are the some tax considerations in Mike's case? What are advantages and disadvantages of the new entity in Costa Rica?

Tutor Answer

(Top Tutor) Daniel C.
School: UCLA

Studypool has helped 1,244,100 students

Review from our student for this Answer

Dec 20th, 2014
"Excellent work as always thanks so much"
Ask your homework questions. Receive quality answers!

Type your question here (or upload an image)

1824 tutors are online

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors