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ACC - Sally became an employee of DotGismo, Inc., a privately held firm




Question;TAX ? CasesSally became an employee of DotGismo, Inc., a privately held firm. On December 15, 20X3, Sally was allowed to buy 20,000 shares of DotGismo stock for $40,000 dollars. When Sally bought the stock, each share was worth $2. DotGismo retained the right to repurchase each share for $2 original purchase price if Sally leaves DotGismo at any time during the next two years for any reason. DotGismo stock increased to $5 per share in December 15, 20X5, when the two year restriction ended. Sally sold the stock on January 18, 20X6 for $9 per share, after the announcement of a new patent for DotGismo. Advise Sally roughly how much tax she must pay and for what year(s). Assume Sally is in the 35% tax bracket for ordinary income and 15% for long term capital gainsInstructions: In writing a tax memo begin the discussion of the law with at least one paragraph on the relevant Code language. Pinpoint the location of the relevant language in the Code as precisely as possible. Then add a paragraph(s) on any relevant Treasury Regulation. Then describe any relevant cases or Revenue Rulings. Write clearly and concisely so that the tax memo is normally limited to three pages.Write a memo identifying the legal ISSUE(s), conclusion, list of relevant authorities, discussion of the law, and the application of the law. Use these subheadings, as it is not enough to describe the law. For each CASE discuss and apply at least one relevant CASE or revenue ruling. The most important aspects of the memo are the ISSUE statement(s) and the application of the law to the problem facts. The application should integrate reference to every source of law previously discussed. Do not just answer the question asked in the problem.


Paper#41185 | Written in 18-Jul-2015

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