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ACC565 Week 2 Discussion 1 and Discussion 2 and Assignment




Question;Discussion 1"Transfers to Controlled Corporations;Please respond to the following;Create a scenario where the transfer of property to;a controlled corporation under Section 351 of the Internal Revenue Code (IRC);results in the taxation to the transferor. Evaluate the fairness of the;taxation of the transaction to the transferor. Provide a tax-planning strategy;to prevent taxation of similar transfers.;From the e-Activity, examine the differences in the;treatment of nonmonetary transactions in corporate formations under GAAP versus;under Section 351 of the IRC. Suggest the main possible reason for these;differences.Discussion 2"Related Party Losses" Please respond to;the following:Section 267 of the IRC disallows a deduction on;losses realized on the sale of property and a deduction for accrued expenses;between a corporation and a controlling shareholder. GAAP does not include this;disallowance provision. Create an argument for allowing a loss on a sales;transaction between a controlled corporation and shareholder when the;transaction includes an independent appraisal and the loss is similar to losses;incurred in arm?s length transactions. Provide an example to support your;argument.;Suppose clients request that their tax return;preparation include the loss on the sales transaction identified between the;controlling shareholder and corporation, as described in Part 1 of this;discussion. Analyze the potential impact and required disclosures resulting;from the inclusion on the financial statements and the tax return of the;corporation. Examine the implications of the uncertain tax position in this;situation on the requirements of Circular 230 and the Statements on Tax;Standards (SSTS).Assignment 1: Client LetterImagine that you are a;Certified Public Accountant (CPA) with a new client who needs an opinion on the;most advantageous capital structure of a new corporation. Your client formed;the corporation in question to provide technology to the medical profession to;facilitate compliance with the Health Insurance Portability and Accountability;Act (HIPAA). Your client is very excited because of the ability to secure;several significant contracts with sufficient capital.Use the Internet and;Strayer databases to research the advantages and disadvantages of debt for;capital formation versus equity for capital formation of a corporation. Prepare;a formal letter to the client using the six (6) step tax research process in;Chapter 1 and demonstrated in Appendix A of your textbook as a guide.Write a one to two 600-;650 page letter in which you:1. Compare the tax advantages of debt versus;equity capital formation of the corporation for the client.2. Recommend to the client whether he / she;should use debt or equity for capital formation of the new corporation, based;on your research. Provide a rationale for the response.;3. Use the six (6) step tax research process, Provided;below to record your research for communications to the client.="msonormal">="msonormal">


Paper#57376 | Written in 18-Jul-2015

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