here are at least 3 issues that can be fully analyzed for full credit. If you see other issues that there are not enough facts for to fully analyze, mention that there is another issue and what additional information would help you resolve it. Raising these additional issues can get you some extra points. As noted in class, answers will be provided in the IRAC format. (See attached file for example of this).
Bonnie is a citizen of the United Kingdom. In 2023, she was accepted to FAU and moved to Boca Raton from the UK. Bonnie was very excited as she had never been to the US before and heard South Florida has excellent beaches. She traveled to Florida on July 7th to give herself time to find an apartment before fall classes began, presenting her F Visa to customs upon arrival. Bonnie plans on attending FAU for both undergrad (expected to take 4 years to complete) and a master’s degree (traditional 2-year program), but she hasn’t yet picked a major.
Bonnie’s dad, Mac, is also a UK citizen. A successful venture capitalist, he travels to the US fairly often. For example, he spent 102 days in the US in 2021 and 84 days in 2022, closing deals. However, he has not had any deals in the US so far in 2023, so he has not spent any time there.
Before Bonnie left for the US, Mac decided to set up a trust with Bonnie as the beneficiary. The trust will hold a US-based bank account to pay for Bonnie’s living expenses while she is in the US. Mac has heard that trusts settled in Wyoming provide excellent creditor protection (Bonnie is accident prone) and forms the trust subject to Wyoming law and administration by the Wyoming court system. Bonnie’s mom, Dorie, also a UK citizen, will be the trustee.
After a few weeks of Bonnie being in the US, Mac decides he can’t stand being away from his little girl anymore. He decides that he can close deals all around the world from anywhere, as long as he has his laptop, so he decides to buy a condo on Palm Beach Island (close enough to Bonnie he can check in but not close enough to smother her) and moves in on August 15th. Mac and Dorie’s relationship hasn’t been going well, so they decide that maybe a little space will improve things. Dorie stays back at home in London and Mac spends the rest of the year in Palm Beach.
Mac reaches out to you early in 2024 and wants to know what US tax concerns he and Bonnie might have.
