Rickey provided the following information after a little prodding from your manager. The estimated loss for the for Rickey Ricardo Trust ("RRT") from operating RR Boat Builders ("RRBB") is $425,000. Rickey Ricardo Boat Builders ("RRBB") has no other income besides this operating loss. That is, RRBB owns no investment assets; its only assets relate to running the boat-building business.
Your manager also tells you that Rickey is 38 years old and is a single taxpayer with no dependents. His former wife divorced him several years ago.  

 
Rickey Ricardo is a wealthy boatbuilder in Maryland. He operates this business through a trust set up by his grandparents. Richie is generally not very hardworking, so he limits his involvement in the trust and in the business. Instead, the trust hires professionals to run the boatbuilding business and the trust's other ventures. The boatbuilding business is cyclical, so its profitability varies considerably over time. Sales are down this year, so the managers expect a sizable loss.  

 
A. Write only the "FI" part of a FILAC memo. That is, you should now write the preliminary Facts and Issues sections of your tax research memo. As we discussed, you probably will have to return to this later in the research process to revise it based on what you learn later, but you can start it now.

Answer rating: 100% (QA)

To Faith Rachael From Marion Jones Date 10102023 Subject Tax Research Memo Rickey Ricardo Trust RRT ... View the full answer