You are a tax consultant. The confused client comes to your office for guidance on the tax impact of the business ideas he is considering developing.

- Single client with no dependents

- You are going to open 2 businesses (operating as an individual):

1- One in PR and the other in the US. Maintain your residence in PR and travel regularly to the US to attend to administrative aspects of your business.

2. Move and establish residence in the US and travel regularly to PR to attend to administrative aspects of your business.

- Explain the tax impact of the Client's alternatives (1 and 2).

- Federal tax rules and consequences

- Federal tax return filing obligation, if any, including the type of return to be filed.

- Type of federal tax you will be required to pay.

- Brief explanation of how the tax liability will be determined/computed.

- Possible deductions to which you would be entitled, including any possible adjustments, if any.

- Possible credits to which you would be entitled.

- Federal tax advantages and/or disadvantages of each (1 and 2).

- Minimum of 6 aspects mentioned above for each of the 1 alternatives.

Answer rating: 100% (QA)

The client wants to know which of these scenarios would have the least tax consequences If the client opens two businesses one in Puerto Rico and the other in the United States and maintains his resid... View the full answer