Accounting Assignment | Custom Assignment Help
Suppose you're a CPA employed to characterize a consumer that's at present below examination by the IRS. The consumer is the president and 95% shareholder of a constructing provide gross sales and warehousing enterprise. He additionally owns 50% of the inventory of a development firm. The consumer’s son owns the remaining 50% of the inventory of the development firm. The consumer has obtained a Discover of Proposed Changes (NPA) on three (three) important points associated to the constructing provide enterprise for the years below examination. The problems recognized within the NPA are unreasonable compensation, inventory redemptions, and a rental loss. Extra info concerning the problems are mirrored under:
- Unreasonable compensation: The taxpayer receives a wage of $10 million composed of a $5 million base wage plus 5% of gross receipts to not exceed $5 million. The entire gross receipts of the constructing provide enterprise are $300 million. The NPA by the IRS disallows the wage primarily based on 5% of gross receipts as a constructive dividend.
- Inventory redemptions: Throughout the audit interval, the development firm redeemed 50% of the excellent inventory owned by the consumer and 50% of the inventory owned by the consumer’s son, leaving every with the identical possession share of 50%. The IRS handled the redemption as a distribution below Part 301 of the IRC.
- Rental loss: The rental loss outcomes from a constructing leased to the development firm owned by the consumer and his son.
Use the Web and Strayer databases to analysis the foundations and earnings tax legal guidelines concerning unreasonable compensation, inventory redemptions handled as dividends and associated occasion losses. Make sure you use the six (6) step tax analysis course of in Chapter 1 and demonstrated in Appendix A of your textbook as a information in your written response.
Write a 4 (four) web page paper during which you:
- Primarily based in your analysis and the info said within the situation, put together a suggestion for the consumer during which you advise both acceptance of the proposed changes or additional attraction of the problem primarily based on the potential for prevailing on attraction.
- Create a tax plan for the longer term redemption of the consumer’s inventory owned within the development firm that won't be taxed in line with Part 301 of the IRC.
- Suggest a method for the consumer to obtain comparable quantities in compensation sooner or later and keep away from the taxation as a constructive dividend.
- Use not less than 5 (5) high quality educational assets on this task. Observe: Wikipedia and different Web sites don't high quality as educational assets.
Your task should observe these formatting necessities:
- Be typed, double spaced, utilizing Occasions New Roman font (measurement 12), with one-inch margins on all sides; citations and references should observe APA or school-specific format. Examine together with your professor for any extra directions.
- Embrace a canopy web page containing the title of the task, the scholar’s identify, the professor’s identify, the course title, and the date. The quilt web page and the reference web page should not included within the required task web page size.
The precise course studying outcomes related to this task are:
- Analyze tax points concerning company formations, capital buildings, earnings tax, non-liquidating distributions, or different company levies.
- Put together consumer, inner, and administrative paperwork that appropriately convey the outcomes of tax analysis and planning.
- Create an strategy to tax analysis that ends in credible and present assets.
- Use expertise and knowledge assets to analysis points in organizational tax analysis and planning.
- Write clearly and concisely about organizational tax analysis and planning utilizing correct writing mechanics.Get accounting task homework assist