Reference no: EM13759624

Assignment 1: Client Letter

Imagine that youare a Certified Public Accountant (CPA)witha new client who needs an opinion on the most advantageous capital structure of a new corporation. Your clientformed the corporation in question to provide technology to the medical profession to facilitate compliance withtheHealth 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 aguide.

Write a one to two (1-2) page letter in which you:

1. Comparethe tax advantages of debt versus equity capital formation of the corporation for
   theclient.
2. Recommend to the client whether he / she shoulduse 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, locatedin Chapter 1 and demonstrated in Appendix A of the textbook,to record your research for communications to the client.

Your assignment must follow these formatting requirements:

• Be typed, doublespaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date.The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Analyze tax issues regarding corporate formations, capital structures, income tax, non-liquidating distributions, or other corporate levies.

• Use technology and information resources to research issues in organizational tax research and planning.

Write clearly and concisely about organizational tax research and planning using proper writing mechanics.

Assignment 2: Constructive Dividends, Redemptions, and Related Party Losses

Suppose you are a CPA hiredto represent a client that is currently under examination by the IRS. The client is the president and 95% shareholder of a building supply sales and warehousing business. He also owns 50% of the stock of a construction company. The client's son owns the remaining 50% of the stock of the construction company. The client has received a Notice of Proposed Adjustments (NPA) on three (3) significant issues related to the building supply businessfor the years under examination. The issues identified in the NPA are unreasonable compensation, stock redemptions, and a rental loss. Additional facts regarding the issues are reflected below:

• Unreasonable compensation: The taxpayer receives a salary of $10 million composed of a $5million base salary plus 5% of gross receipts not to exceed $5 million. The total gross receipts of the building supply businessare $300 million. The NPA by the IRS disallows the salary based on 5% of gross receipts as a constructive dividend.
• Stock redemptions: During the audit period, the construction company redeemed 50% of the outstanding stock owned by theclient and 50% of the stock owned by the client's son, leaving each with the same ownership percentage of 50%. The IRS treated the redemption  as a distribution under Section 301 of the IRC.
• Rental loss: The rental loss results from a building leased to the construction company owned by theclient and his son.

Use the Internet and Strayer databases to research the rules and income tax laws regarding unreasonable compensation, stock redemptions treated as dividends and related party losses. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

Write a three to four (3-4) page paper in which you:

1. Based on your research and the facts stated in the scenario, prepare a recommendation for theclient in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal.
2. Create a tax plan for the future redemption of theclient's stock owned in the construction company that will not be taxed according to Section 301 of the IRC.
3. Propose a strategy for theclient to receive similar amounts in compensationin the future and avoid the taxation as a constructive dividend.
4. Use the six (6) step tax research process, locatedin Chapter 1 and demonstrated in Appendix A of the textbook,to record your research for communications to the client.

Your assignment mustfollow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Analyze tax issues regarding corporate formations, capital structures, income tax, non-liquidating distributions, or other corporate levies.
• Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.
• Create an approach to tax research that results in credible and current resources.
• Use technology and information resources to research issues in organizational tax research and planning.
• Write clearly and concisely about organizational tax research and planning using proper writing mechanic.

Assignment 3: Reorganizations and Consolidated Tax Returns

Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two (2) subsidiaries acquired through Type B reorganizations. Theclient has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.

• The company currently files a consolidated income tax return with the two (2) subsidiaries acquired through a Type B reorganization.
• ABC Corporation,a subsidiarytargetedby theclient for takeover, has substantial net operating losses.
• XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six (6) months.

Use the Internet and Strayer databases to researchthe rules and income tax laws regarding Types A, B, C, and D reorganizations and consolidated tax returns.Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

Write a four to six (4-6) page paper in which you:

1. Comparethe long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to theclient.
2. Suggest the type of reorganization theclient should use for the ABC Corporation based on your research. Justify the response.
3. Propose a taxable acquisition structure for the client's planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for theclient.
4. Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and provide a recommendation to your client. Support the recommendation with applicable research.
5. Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.
6. Use the six (6) step tax research process, locatedin Chapter 1 and demonstrated in Appendix A of the textbook,to record your research for communications to the client.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.

• Evaluate tax-planning strategies related to liquidating distributions, acquisitions, and reorganizations.
• Create an approach to tax research that results in credible and current resources.
• Research and analyze tax issues regarding consolidated tax returns.

• Use technology and information resources to research issues in organizational tax research and planning.

• Write clearly and concisely about organizational tax research and planning using proper writing mechanics.

Assignment 4: Tax-Planning Client Letter on Irrevocable Trusts, Gift Tax, and Estate Tax

Suppose you are a CPA, and your client has requested advice regarding establishing an irrevocable trust for his two (2) grandchildren. He wants the income from the trust paid to the children for 20 years and the principal distributed to the children at the end of 20 years.

Use the Internet and Strayer databases to researchthe rules regarding irrevocable trusts, gift tax, and estate tax.Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

Write a one to two (1-2) page letterin which you:

1. Analyze the effect of an irrevocable trust on the gift tax and future estate taxes.
2. Suggest other significant alternatives that the client coulduse both to reduce estate tax and tomaximize potential advantages of the payment of gift taxes on transfers of property.
3. Use the six (6) step tax research process, locatedin Chapter 1 and demonstrated in Appendix A of the textbook,to record your research for communications to the client.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.
• Create an approach to tax research that results in credible and current resources.
• Analyze tax issues regarding the gift tax and the estate tax.
• Analyze tax issues regarding trusts and estates.

• Use technology and information resources to research issues in organizational tax research and planning.

Write clearly and concisely about organizational tax research and planning using proper writing mechanics.