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We'll visit techniques for increasing parallelism later in this book, but first let's define the types of parallelism that exist First, there are two parts of any application where parallelism can be extracted in hardware and in software and each offers a variety of ways to exploit it At the hardware level, there are architectures that, by design, are parallel The major ones relevant today are



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Massively parallel processors (MPP), which consist of processing nodes that don't share data (ie, shared-nothing) but compute by routing data between nodes Symmetric multiprocessing (SMP) machines, which consist of multiple processors that do share the same data Basically, any processor is free to use any data Clustered computing systems, which consist of multiple computers that typically don't share the same data but route it between computers over a network

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196 - Income Tax Planning (b) By leasing property to the corporation, the shareholders receive rent payments that are deductible expenses for the corporation (3) Dividends are paid with after-tax dollars (double taxation), but salaries, interest, and rent are paid with before-tax dollars B Constructive dividend: a distribution by a corporation to a shareholder that the corporation classi es as salary, interest, rent, or some other type of payment but that the IRS classi es as a dividend C Using closely held corporations as a tax shelter (1) Corporations generally offer lower tax rates than the high individual tax rates (2) Corporations avoid double taxation by accumulating earnings, thus increasing the value of the stock The unrealized appreciation of stock is not taxable (3) When the stock is sold or liquidated at some future time, corporations recognize a taxable gain while indirectly paying a second tax on the accumulated earnings This strategy reduces the present value of the second tax (4) Three factors create tax savings: (a) Spread between the corporate and individual tax rates (b) Deferral of tax payments (c) Conversion of ordinary income (dividend payments) to capital gain income 3 Flow through of income and losses to partnerships and S Corporations A Tax basis (1) A partner s initial basis equals initial investment of cash or property plus the share of partnership debt for which the partner may ultimately be held responsible Suppose, for example, three individuals each deposit $10,000 into a partnership in which they are equal general partners The partnership borrows $15,000 from a bank to buy supplies and equipment Each partner s basis is $15,000: the initial cash contributions plus a proportionate share of the partnership debt (2) A shareholder s initial basis in stock of an S Corporation equals the cash plus the adjusted basis of any property transferred in exchange for the stock No debt is included in the shareholder s stock basis because there is no personal liability in S Corporations However, a shareholder can have a separate basis in a debt obligation B Reporting requirements Partnerships and S Corporations are not taxable entities Taxable income is measured and characterized at the entity level and taxed directly to the partners or shareholders C Tax consequences to partners (1) Each partner receives a Schedule K-1 that details information about the partner s distributive share of the partnership s income or loss from business items and separately stated items, such as dividend income, capital gains, and charitable donations (2) The cash ow from the business is irrelevant to the computation of the partner s tax liability Thus, the partner is taxed on his or her distributive share of the partnership income whether or not the amount is actually distributed (3) General partners are required to pay self-employment (SE) tax on their distributive share of ordinary business income Limited partners are not considered self-employed and are not required to pay SE tax on their distributive share of ordinary income D Tax consequences to shareholders of an S Corporation.

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