Mickey And Minnie Case Summary
Facts
Mickey was convicted for murder and consequently sent to prison to serve a life sentence. Throughout the ordeal Mickey continued professing his innocence to which his sister believed. Minnie spent three years in law school and the next two investigating the case by gathering facts, which she used to prove his brothers innocence. From this experience, Mickey and Minnie authored a book about their experience and intend to assign the book, movie and photo rights to Disney Films for a sum of $750,000.
Issue and conclusion 1
Will the transaction be viewed as a sale or a license?
The transaction will be viewed as a sale of rights.
Analysis 1
According to Sec 204 of the copyright act, a person can either sell or transfer the copyright rights of their work. When …show more content…
Yes, there are opportunities for tax planning that include either the formation of a partnership or a joint venture.
Analysis 3
The siblings are receiving an income of $750,000 shillings which will be taxed as ordinary income to them. Prior to receiving the income they can form a partnership or a joint venture that can be used to sell the rights to the film company. The advantage in this is that the company can then purchase assets using this money, and offset any expenses that may arise in the running of the company. This is in accordance with the IRS code title 26 sec 162(2).as well as (26 U.S.C. 162(e)(2)(B)(ii) which sets out the deductions and rates they would pay. However they would then need to look for a business idea that would be run by the business. If Mickey and Minnie do not want to venture into any form of business, then they will have to share the income and be taxed as individuals.
Another option would be to come up with a corporation that would enter the transaction on their behalf. However a company would be cumbersome to put up and is required to abide by a variety of federal and state
Mickey was convicted for murder and consequently sent to prison to serve a life sentence. Throughout the ordeal Mickey continued professing his innocence to which his sister believed. Minnie spent three years in law school and the next two investigating the case by gathering facts, which she used to prove his brothers innocence. From this experience, Mickey and Minnie authored a book about their experience and intend to assign the book, movie and photo rights to Disney Films for a sum of $750,000.
Issue and conclusion 1
Will the transaction be viewed as a sale or a license?
The transaction will be viewed as a sale of rights.
Analysis 1
According to Sec 204 of the copyright act, a person can either sell or transfer the copyright rights of their work. When …show more content…
Yes, there are opportunities for tax planning that include either the formation of a partnership or a joint venture.
Analysis 3
The siblings are receiving an income of $750,000 shillings which will be taxed as ordinary income to them. Prior to receiving the income they can form a partnership or a joint venture that can be used to sell the rights to the film company. The advantage in this is that the company can then purchase assets using this money, and offset any expenses that may arise in the running of the company. This is in accordance with the IRS code title 26 sec 162(2).as well as (26 U.S.C. 162(e)(2)(B)(ii) which sets out the deductions and rates they would pay. However they would then need to look for a business idea that would be run by the business. If Mickey and Minnie do not want to venture into any form of business, then they will have to share the income and be taxed as individuals.
Another option would be to come up with a corporation that would enter the transaction on their behalf. However a company would be cumbersome to put up and is required to abide by a variety of federal and state