15 Jan Using the text, the readings

ACC525 Advanced Topics in Taxes

Unit 1 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

Do you believe that a progressive, proportional, or regressive tax is the most fair? Explain your answer.

Last year your client Barney Brown, worked part-time for Timely Tax Services. Barney was promised an hourly wage plus commission. He worked under this arrangement from early February until April 15th. His accrued pay amounted to $900 plus $120 commissions. When he went to collect his pay, however, he found only a vacant office with a sign on the door reading “Nothing is sure but death and taxes.”

Can Barney take a bad debt deduction for the wages and commission he was unable to collect?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 2 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

Discuss why corporations frequently offer both qualified and nonqualified retirement plans to their employees.

Palace Company (an accrual-basis taxpayer) is writing the lease agreement for its new apartment complex, Palace Apartments, which will rent for a minimum of $2,000 per month. Palace wants tenants to pay $6,000 when they sign the lease and is considering two alternatives. Under the first alternative, $4,000 would be rent for the final two months of the lease, with $2,000 for the damage deposit. Under the second alternative, $2,000 would be for the last month’s rent and $4,000 would be for the damage deposit.

Discuss the tax implication of each alternative and recommend one.

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 3 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

What are the characteristics of a qualified trade or business? What records can the IRS require from a taxpayer to substantiate a qualified trade or business deduction?

Ken, owner of Kendrick Corporation, realizes that he needs to send an employee to a temporary assignment at a plant in another state. He can either send one employee for an 18-month assignment or two employees for 9-month assignments. Kendrick Corporation will pay for all the meal and lodging expenses while the employees are on their out-of-town assignments.

Does it make any difference from a tax perspective to Kendrick and to the employees which option Ken chooses?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 4 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

Explain the difference between a realized gain and a recognized gain. How is the amount realized on a sale or exchange determined? Provide an example.

Juan owns 40% and Mario owns 60% of Crispy Donuts, Inc. (CDI). Juan wants to buy out Mario’s interest in CDI, so he arranges a stock sale agreement under which CDI will redeem (purchase) all of Mario’s shares for $900,000. This will then make Juan the sole shareholder of CDI. Juan wants to ensure that Mario does not open a competing donut business nearby so he also has a covenant-not-to-compete drawn up at the same time as the stock sale agreement.

Under the terms of the covenant-not-to-compete, Mario cannot open another donut business within a 10 mile radius for a period of five years. During this 60 month period, CDI will pay Mario $9,000 per month in return for his agreement not to compete. CDI wants to know over what time period it should amortize the covenant-not-to-compete.

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 5 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

What types of realty qualify for like-kind exchange treatment? What kinds of personalty qualify for like-kind exchange treatment? Give some specific examples.

The Glades Corporation has located a building that it would like to have for its new warehouse. The corporation has contacted the owner about making a trade for its existing property. The owner of the desired property is only willing to sell the building for cash as he will have little gain on the sale and has no use for the Glades property. Glades, however, has an extremely low basis in its property and is unwilling to sell it in order purchase the new property. Is there an alternative that will satisfy Glades and the owner of the warehouse property?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 6 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

List three items that increase book income and three items that reduce book income when reconciling book to taxable income. Why do you think it is appropriate for these items to be “book/tax” adjustments? Explain.

One of Corbett Corporation’s shareholders, Gene, is having severe financial problems due to extensive medical expenses. He has approached the company for a loan, but the other shareholders on the board of directors refuse to approve it. Gene owns 25 percent of the corporate stock with a basis of $100,00 and his brother owns 10 percent of the stock. Gene is not related to any of the other shareholders. One percent of the stock is worth $10,000. Gene needs $100,000 to pay off his current medical bills. The corporation has $100,000 in its accumulated earnings and profits account.

What alternatives can you suggest to Gene and the corporation that would provide Gene the money he needs while minimizing taxes?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review the rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 7 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

Cynthia needs your advice regarding which form of business entity to choose for her new business. She expects the new business will have losses of approximately $80,000 in each of the first two years but anticipates profits that will grow steadily thereafter. Cynthia has no cash to contribute to the business but plans to work 50 or more hours per week managing the day-to-day operations of the new business. Four individuals will contribute $50,000 each to start the businesss. To fund growth, Cynthia anticipates that additional funding will be needed in three years. Cynthia wants to meet with you next week to discuss your analysis and preliminary recommendations

Based on this information only, what would you recommend?

Before meeting with Cynthia, what questions would you ask her to obtain additional information ao you could conduct a more thorough analysis?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review the rubric for discussion requirements.

ACC525 Advanced Topics in Taxes

Unit 8 Discussion

Using the text, the readings and other exercises, as well as any additional research done, discuss here what some of your learnings and insights are regarding the revenue and expenditure issues. Also share what you think some of the challenges might be when it comes to these issues/topics.

What is the difference between a tax credit and a tax deduction? Give examples of each. When would it be advantageous to a taxpayer to have one or the other or both? Explain.

Samantha is a single parent providing the sole support for her six-year-old daughter, Hillary. They live in an area of Anytown where the public school is known to have problems with drugs and other crimes. Samantha wants to send Hillary to a private school to avoid these problems and provide a better environment for Hillary’s educational development. Eight years ago, Samantha set up two trusts to manage the securities she inherited from her grandfather. Samantha is the sole beneficiary of Trust A from which she receives bimonthly distributions each made after approval by the trustee. Hillary is the sole-beneficiary of Trust B and all distributions from this trust must be approved by its trustee. If Samantha convinces the trustee to pay for Hillary’s tuition, writing a check out of Trust B funds to the school, are there any income tax consequences to Samantha?

Consider any ethical issues that may arise. Cite proper IRS regulation(s) to support your point of view. Review the rubric for discussion requirements.