Question

Mr. Josh Kenney, a U.S. citizen and resident of Vermont, owns 100 percent of the stock of JK Services, which is incorporated under Vermont law and conducts business in four counties in the state. JK Services owns 100 percent of the stock of JK Realty, which is incorporated under Massachusetts law and conducts business in Boston.

a. How many taxpayers are identified in the given statement of facts?
b. Identify the governments with jurisdiction to tax each of these taxpayers.

Answer 1

There are three taxpayers identified in the statement: Mr. Josh Kenney, JK Services, and JK Realty. The federal government, and the state governments of Vermont and Massachusetts have jurisdiction to tax these entities. Additionally, local governments where the entities conduct business may also have taxing jurisdiction.

Step-by-step explanation:

The given statement of facts identifies three taxpayers: Mr. Josh Kenney, JK Services, and JK Realty. Each of these entities has potential tax obligations based on their activities and locations. Mr. Josh Kenney, as an individual U.S. citizen and resident of Vermont, would be subject to federal income tax as well as state income tax from Vermont.

JK Services, incorporated in Vermont and conducting business in four counties within the state, is subject to state corporate income tax in Vermont and potentially local taxes in the counties where it operates. JK Realty, a corporation incorporated in Massachusetts and doing business in Boston, is subject to corporate income tax in Massachusetts and could also be subject to local taxes in Boston.

Therefore, the federal government and the state governments of Vermont and Massachusetts have jurisdiction to tax the identified taxpayers. Mr. Kenney has obligations to the federal government and the state of Vermont, JK Services has obligations to Vermont, and JK Realty has obligations to Massachusetts. Local taxes may also apply based on the specific counties and municipalities where the businesses operate.

Answer 2

a. Taxpayers in the scenario:

There are three (3) taxpayers and these are:

• Mr. Josh Kenny
• JK Services
• JK Realty

b. Governments with jurisdiction:

• Mr. Josh Kenny falls under the State of Vermont where he is a resident.
• JK Services falls under the State of Vermont where it is incorporated and operates.
• JK Realty falls under the City of Boston where it is operates.