Required:

You will be meeting shortly with Mimi, Nancy, and Joan to discuss the tax aspects of the incorporation. Be sure to review the following items:

• Review the various options available for operating the business and the tax consequences of these options.

• Mimi certainly will ask you to cover the issue of which assets to contribute to the new corporation, with the explanations that Duvall could not provide. Concentrate on those issues for this meeting, offering at least two alternative plans for the asset transfers be sure to include computation of tax effect of the alternative plans.

• At the meeting, Nancy will look to you for information on issues of asset basis, as well as any effects that the incorporation might have on sales/use and self-employment tax obligations.

• Ignore any exposure to the individual alternative minimum tax.

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