Your client, Apex Corporation, entered into an agreement with an executive to purchase his personal residence at its current FMV in the event that his employment is terminated by the company during a five-year period. The executive’s job was terminated before the end of the five-year period and Apex acquired the house for $500,000. Due to a downturn in the real estate market, a $200,000 loss was incurred by the company upon the resale of the house. The chief financial officer of Apex insists that the loss be characterized as ordinary, based on the Corn Products doctrine. Your research into this matter reveals that the weight of authority heavily favors capital loss treatment (i.e., case law based on facts identical to the above issue held that the loss was capital rather than ordinary). You therefore conclude that the client’s position does not have a realistic possibility of being sustained administratively or judicially on its merits if challenged by the IRS. What responsibility do you have as a tax practitioner relative to preparing the client’s tax return and rendering continuing tax consulting services to the client? (See the Section Statements on Standards for Tax Services in Chapter i:1 for a discussion of these issues.)