The writer is very fast, professional and responded to the review request fast also. Thank you.
Presentation/PPT
27/08/2022
James Blaine is the sole shareholder and president of Blaine Foods, Inc. which operates a successful fast-food franchise. • Mr. Blaine owns the building and land from which the franchise is operated, but the corporation owns the franchise and leases the building and land from Mr. Blaine. • Mr. Blaine is paid a salary of $150,000 a year. He also earns $50,000 per year in interest, dividends, and capital gains on his investment account. • Mr. Blaine, age 50, is married and has three children nearing college age. • He currently has no qualified plan in place at Blaine Foods and would like your help in developing one for 2019 (assume that it is currently September 20, 2019). • The corporation averages a cash flow of $35,000 to $55,000 per year after the owner’s compensation. • The restaurant is managed by one general manager and two assistant managers who have worked for James Blaine for at least five years. • The general manger is paid $65,000 per year, and the two assistants average $45,000 annually (all the managers are between 28 and 34 years old). • The rest of Blaine’s employees can be divided into two groups. Group A (ten employees) are short-term, part-time high school students who will make between $650 and $6,000 during 2018. Group B (12 employees) are over 21 and will earn more than $6,000 in 2018. The total compensation for these two groups for 2018 will be $35,000 and $171,000, respectively. • James Blaine would like to increase his savings for retirement beyond his regular IRA contributions. He wants to maximize his tax-deductible contributions, without incurring large expense for his regular employees, who are likely to remain with the company for only a short time.
James Blaine has asked you the following questions:
1. If in 2019 a qualified profit-sharing plan is established at Blaine Foods, Inc. what is the maximum contribution that could be made on the behalf of James Blaine?
2. If in 2019 Mr. Blaine established a SIMPLE IRA plan what is the maximum contribution that could be made on the behalf of James Blaine?
3.For James Blaine, what is the primary advantage of establishing a defined-benefit plan at Blaine Foods?
4. Which of the following retirement vehicles are not options for Mr. Blaine or Blaine Foods: a. Roth IRA b. Defined-benefit pension plan c. SIMPLE IRA d. 401(k) plan
5. What type of retirement plan would you recommend?
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The writer is very fast, professional and responded to the review request fast also. Thank you.
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