Analysis of tax and investment factors between New York and Florida

1. Analysis of tax and investment factors between New York and Florida USA Headquarters Antenna in Russia Antenna in Luxembourg IBC GROUP IBC GROUP IBC GROUP MiamiTower Lyteiny pr. 60 2-8 Ave. Charles de Gaulle 100 S.E. 2nd Street, Suite 2222 A St.Petersburg, 191125 Luxembourg, L-1653 Miami, FL, 33131 USA Russia Tel: +1 (305) 358-4441 Tel: +7 (911) 215-8027 Tel: +352 27-0012 Fax: +1 (305) 358-1144 Fax: +7 (812) 272 5667 Fax: +352 27-0012-205 IBCusa1@aol.com IBCrussia1@gmail.com IBCeurope1@gmail.com WWW.IBC-INTERNATONAL.COM

2. IBC’s Executive Summary • 26 years of experience in secure investments • 185 consultants in wide range of jurisdictions, including tax havens • Specializes in supporting clients to successfully acquire, manage and sell secure investments (real estate and gold) while minimizing taxes.

3. FLORIDA • Very low tax rates (Constitution prohibits personal income tax) • State government budget is almost balanced • Continuing vigorous population growth (2-3% per year) • Tourism:84,000,000 visitors annually • Healthy Business Climate: few regulations, little bureaucracy & “right to work” law (few unions). Very pro-international climate, dynamic economy • Agriculture: 1st citrus state, 2nd cattle state • Banking and finance: 3rd largest US Center • Mining: $1.92 Bln/year industrial mineral production, fifth in the USA • Trade: 5 deep water ports & 40+ free trade zones • High profile and well-educated population; many Europeans, wealthier classes • Main real estate trend: immigration of wealthy investors • Now – highly discounted prices (substantial capital gain opportunities)

4. NEW YORK • Very high tax rates in New York State and New York City • NYS & NYC budgets suffering severe deficits ($40 bln. & 25 bln.) • Population is steadily declining • Strained business climate (tough bureaucracy, many regulations & strong unions) • Older industries declining (“rust belt”, textile & small manufacturers) • Still № 1 in banking and finances, but hemorrhaging • Tourism is growing industry but still lukewarm (approx. 60 mm) • International trade (still active but declining; only 20± trade zones) • Population composition problems (high poverty rates, large welfare classes, emigration of wealthier classes) • Main real estate trends: lower growth and out migration • Lower potential for real estate gains

5. Growth & price statistics 2000-2030: FL +81% NY + 2% Single Home price index Source: US Bureau of Economic Analysis, Standard & Poor's Case-Shiller Home Price Indices

6. Example № 1: Russian purchase of condominium in the USA • Mr. Ivanov, a Russian citizen and tax resident. • Mr. Ivanov purchases a condominium for $250,000 and spends a further $50,000 to renovate the property. • Mr. Ivanov rents out his condominium at the normal rate of 12% a year, equal to $36,000 gross income per year. • Mr. Ivanov takes no property tax exemptions and purchased the condominium unit with fee simple title in his own name. He derives no other income from the US. • What are the tax consequences in New York and Florida?

7. Comparison of Rental Taxes - New York City vs. Florida - Housing in Miami is on average 66% cheaper than a comparable sq. ft sized property in NYC. - Profits from rents in NYC are subject to federal , state that the and city income tax at local rates. - For the same purchase price the Miami condo would be substantially larger. - Depreciation is a notional amount for tax purposes .

8. Example № 2. Sale of United States Condominium by Russian owner. • Now assume that Mr. Ivanov, after holding his apartment, for five years, finds a buyer. The real estate market has recovered and he is able to sell the property (seller’s closing costs included) for $500,000. What are the comparative tax consequences to Mr. Ivanov in New York City and Miami ?

9. Sale of Property – Approximate Tax Consequences New York City vs. Miami, Florida