Essay on Partnership Taxation Homework

Now that we have converted the sole proprietorship to a s-corporation, the tax planning and strategic planning must be the next topic to address. Since Mr. Jones does not have a spouse, he must consider Mandy as the heir to business and his estate. The Current value of his estate is 53 million dollars. He currently wants his daughter to control 40% of the business and be employed by the business. This memo will discuss the following topics: tax planning, strategic planning, estate planning, transfer of assets and selling the business.

18) Barbara sells a house with an FMV of $170,000 to her daughter for $120,000. From this transaction, Barbara is deemed to have made a gift (before the annual exclusion) of

Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $431,550. The estimated fair values of the assets are land $82,200, building $301,400, and

After critical examination of the related standards, we conclude that cash, common stock, contingent consideration and replacement stock option awards attributable to pre-combination services should be considered to determine consideration transferred. As a result, total consideration transferred is (in million)

The assets and liabilities being obtained were recorded by the buyer at fair value as of the date of acquisition

d. A parent exchanges its ownership interests or the net assets of a wholly owned subsidiary for additional shares issued by the parent’s less-than-wholly-owned subsidiary, thereby increasing the parent’s percentage of ownership in the less-than-wholly-owned subsidiary but leaving all of the existing noncontrolling interest outstanding.

Under Section 351(a), the transfer of property to a corporation is nontaxable only if the transferors control the corporation immediately after the exchange; control is defined as being 80% of the corporations voting stock. Reg. Sec. 1.351-1(a) further outlines the requirements for an 80% control test, but does not mention of provide any further insight on whether the prearranged binding agreement which had Bob sell half of his stock to Carl will meet the control requirements. There are 2 factors listed in Reg. Sec. 1.351-1 that could

3. Store equipment of $44,000 was purchased by signing a short-term note payable. Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock.

Section 743(a) disrupts Subchapter K’s goal of basis uniformity by leaving the basis in partnership assets unaffected by transfer of a partnership interest. The undisturbed basis most likely leaves the transferee partner with basis different from the seller and from that interest’s share of the partnership’s inside basis.

In Rel. Rul. 2003-51, there provides a successful example of Section 351 exchange that the transferor transfers property to a corporation in exchange stock and immediately after the transferor meets the requirement of in control of the corporation and involves the issue of the “pursuant to a binding agreement” with a third party before the exchange. Corporation W engages in businesses A, B, C. Another unrelated Corporation to W that is called Corporation X also engages in business A through X’s wholly owned domestic subsidiary, Y. At the same time, W and X wants to consolidated their business and form a new corporation from their operations in business A. In order to reach this goal and pursuant to a prearranged binding agreement, W then forms a Corporation called Z and transfers all of the assets from business A to Z to exchange Z’s stock that is their first transfer. Immediately thereafter, W transfers all of its Z stock to Y in order to exchange Y’s stock that is their second transfer. X then transfers $30x to Y to meet business A’s capital needs simultaneously that is the third transfer. After that, Y transfers the $30x from X and its assets from business A to Z that is the fourth transfer. W and X can own 40 percent and 60 percent outstanding stocks in Y after second and third transfers. Each of the first transfer, the combined second and third transfers and the fourth transfer qualifies to be Section 351 transaction. In the “Analysis” of Rel.

1). The corporation is in the process of developing a new flu vaccine which is nearing the final development stage.to complete this project, the corporation need $25,000,000 of additional fund. The local banks are reluctant of giving loan to the corporation because of the lack of sufficient collateral and the riskiness of the business. The sole stockholders of the corporation Bard Abrams and Dr. Amber Epstein who are organizing the corporation, had a discussion between them. They had a proposal of issue of additional stock. They would like to promise the new investors to pay 5% of sales until they have received an amount equal to what they paid for the stock. They are also obliged to pay an amount of $120 per share.

In January 2016, the CEO of Round Table, Percival, received a cash bonus that he used to acquire 50 shares of Avalon from an unrelated single party. The scope of this specific transaction merely needs to be analyzed because it is necessary to conclude if it should be a part of the stock for stock exchange that occurs between the two entities. The transaction is at risk because of its potential to violate the “solely for stock” requirement of a B-type reorganization. There are several components of Percival’s purchase that should be examined to determine whether it would be considered part of the stock for stock exchange, which could then have an impact on the tax-free nature of the exchange. First, the timing of the transaction is a very important factor in the purchase. Two months after Round Table agreed

On the occurrence of any liquidation, dissolution or winding up of the Company, the Series A Preferred shareholders will be entitled to receive, in preference to the ordinary shareholders, an amount equal to US$2 per share plus any accrued but unpaid dividends. If any sums remain after such payment, they will be distributed to all shareholders on an as converted basis.

Prior to the implementation of the Internal Revenue Code of 1954, the character of gain produced by the sale of a partnership interest was uncertain. It was not clear if the sale should be viewed as a sale of a single capital asset, or the sale of undivided interests in partnership assets which

The inclusion of the assets of stock material and leasehold have to be added Clause 1, that describes Assets, or could be added to an attached Schedule that describes all the assets that are to be transferred to the Buyer.