Exhibit 3.1:

1. 4 points Based only on the information provided for each scenario, determine whether Eddy or Scott will benefit more from using the timing strategy and why there will be a benefit to that person. Use Exhibit 3.1. a. Eddy has a 30% tax rate. Scott has a 40% tax rate. b. Eddy and Scott each have a 40% tax rate. Eddy has $10,000 of income that could be deferred; Scott has $20,000 of income that could be deferred. c. Eddy and Scott each have a 40% tax rate and $20,000 of income that could be deferred. Eddy's after-tax rate of return is 10%. Scott's after-tax rate of return is 8%. d. Eddy and Scott each have a 40% tax rate, $20,000 of income that could be deferred, and an after-tax rate of return of 10%. Eddy can defer income up to three years. Scott can defer income up to two years. a a. Answer here (Eddy or Scott), b. Answer here (Eddy or Scott). c. Answer here (Eddy or Scott), d. Answer here (Eddy or Scott), Year 4% 5% 6% 7% 8% 9% 10% 11% 12% 1 .962 .952 .943 .935 .926 1917 .909 .901 .893 2 .925 .907 .890 .873 .857 .842 .826 .812 .797 3 .889 .864 .840 .816 .794 .772 .751 .731 .712 4 .855 .823 .792 .763 .735 .708 .683 .659 .636 5 .822 .784 .747 .713 .681 .650 .621 .593 .567 6 .790 .746 .705 .666 .630 .596 .564 .535 .507 7 .760 .711 .665 .623 .583 .547 .513 .482 .452 8 .731 .677 .627 .582 .540 .502 .467 .434 .404 9 .703 .645 .592 .544 .500 .460 .424 .391 .361 10 .676 .614 .558 .508 .463 .422 .386 .352 .322 11 .650 .585 .527 .475 .429 .388 .350 .317 .287 12 .625 .557 .497 .444 .397 .356 .319 286 .257 13 .601 .530 .469 .415 .368 .326 .290 .258 .229 14 .577 .505 .442 .388 .340 .299 .263 .232 .205 15 .555 .481 .417 .362 .315 .275 .239 .209 .183