Assignment 2: Transfers to a Corporation
Imagine you are a CPA. A client engages you to determine how best to transfer property and perform services to a corporation in exchange for stock with minimal exposure to taxes and risk of an IRS audit. Assume that the client is forming this corporation with two other people who also plan to contribute property and services to the corporation.
Using the Internet or Strayer databases, research the rules regarding the transfer of property and services to a corporation in exchange for stock. Include a review of the IRS to determine its level of interest and audits conducted related to this area.
Write a three to four (3-4) page paper in which you:
Based on your research, determine the types and methods of transfers that will most likely trigger a taxable event for your client. Indicate how you are likely to present this information to your client.
Based on your research, evaluate which types of transfers are most likely to increase the risk of an IRS audit and the impact of the advice given to your client.
Recommend the most advantageous types and methods of property and service transfers to your client in exchange for stock to minimize any tax liability and risk of audit. Support your recommendations with examples.
The specific course learning outcomes associated with this assignment are:
Evaluate tax planning strategies related to liquidating distributions, acquisitions, and reorganizations.
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 mechanics.
