Taxation of eBusiness

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Taxation of e-Business
John E. Karayan, JD PhD Professor of
Taxation Department of Accounting
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Goals

• Strategic versus Tactical
• Optimize Family Wealth
• Generic Strategies

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Importance of Tax Awareness

• Cash Flow
• Wealth Accumulation
• Taxes Leverage EPS

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Tax Planning

• Global Perspective All Taxes
• Multilateral All Related Parties
• Strategic Consider Non-Tax Factors

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Interaction with Other Taxes

• Step-up in basis at death versus avoiding future
  appreciation
• Prop. 13 property tax revaluation
• Social Security Tax on Kids in Corps.

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Importance of Non-Tax Considerations

• Mixing and matching families QTIP Trusts
• Entrepreneurs want to retain control
  U-Haul, Carls, and King Lear
• Liquidity and Access to Capital Markets

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Making Sure the Tail Does Not Wag the Dog

• Cinderella
• Student Financial Aid
• Hippies

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The Essence The Least Intrusive Alternative
1. Integrate with Clients Other Goals 2.
Search for Defensible Positions 3. Look for
Asymmetries (the Holes)
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Examples
Cost Recovery Depreciating Land? Crossing
Borders Taxed Nowhere? Is The Estate Gift Tax
Voluntary?
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How Can You Find The Holes?

• A. The Deep Structure of Taxation
• B. The Legislation Pendulum
• Sitting in Offices
• Importing and Exporting

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Generic Arbitrage and Time Value of Money
Creation use tax giveaways
Conversion better tax status
Timing better tax year
Splitting multiple graduated rates
Fraud cheat
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Strategies 1 R(1-t0)n
Creation tc? 0
Conversion tg lt to
Timing (1 R)n(1-te) tf
Splitting (te1 te2 ) lt t0
Fraud to 0 or gt100
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Wrap

• Browse www.taxsites.com
• Familiarize with Librarys Web based
  student tax resources
• Do on-line how to use tutorial for CCH
  Tax Research Network