From: Jeffrey Epstein <[email protected]> To: Melanie Spinella Subject: Fwd: PRO-FORMA TAX TREATMENT - AIRCRAFT OPERATION Date: Thu, 26 Sep 2013 10:58:48 +0000 Attachments: Avioneta_-_2012_TB_-_Proforma_Tax_Treatment.pdf Inline-Images: primeglobal_color blktext_tagline4823 jpg; rem-newlogo_sm29.png; 2013_ipatop100(2)18bejpg please print out attachment for leon. this makes no sense Forwarded message From: Thomas Turrin Date: Tue, Sep 17, 2013 at 4:40 PM Subject: PRO-FORMA TAX TREATMENT - AIRCRAFT OPERATION To: Jeffrey Epstein <jeesios@grrtn> Cc: Eileen Alexanderson < Jeffrey, The attached schedule of pro-forma tax treatment is based on actual year 2012 activity and assumes the aircraft was placed in service on Jan 1st, 2012 and was Part 135 for the whole year. Included in the schedule is the amount of US excise tax on the gross revenue (including revenue from business and "personal" use). Under Part 135, my understanding is that all of the "revenue" (including personal use) is subject to 7.5% US excise tax (per discussion with Pat Fenn at Akin Gump and based on my own research). I calculated the loss using bonus depreciation (50%) and without bonus depreciation. The operation of the aircraft would be characterized as a passive activity on Leon's return. Leon would not be able to claim that he is materially participating in an active trade or business with respect to the aircraft operation (IRC Code Sec 469). The loss would be deductible to the extent of Leon's income from other passive activities. Passive activity income does not include portfolio income from interest, dividends and EFTA01141876