Question: I am having a hard time finding the information to do this assignment. I have used the internet and I just can't find the information.
I am having a hard time finding the information to do this assignment. I have used the internet and I just can't find the information. Here is my question:
Overview
Suppose you are a CPA hired to represent a client who is currently under examination by the IRS. The client is the president and shareholder of a building supply sales and warehousing business. He also owns of the stock of a construction company. The client's son owns the remaining of the construction company's stock. The client has received a notice of proposed adjustments NPA on three significant issues related to the building supply business for 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:
Stock redemptions: During the audit period, the construction company redeemed of the outstanding stock owned by the client and of the stock owned by the client's son, leaving each with the same ownership percentage of
The IRS treated the redemption as a distribution under IRC Section
Instructions
Write a page explanation, following the client letter format, in which you:
Determine reasonable versus unreasonable compensation as outlined in the IRS a law.
Establish when stock redemption is taxable and when it is not. Provide an example of each situation as it relates to the assignment scenario.
Create a tax plan. Use Section of the IRC.
Develop a researchbased and ethical strategy for the client to receive multiple sources of compensation without getting penalized with taxes.
Assess the effect of an irrevocable trust on the gift tax and future estate taxes.
Propose ethical suggestions to reduce estate tax and gift taxes on property transfers. Use at least three resources to support your research or recommendations. Choose credible, relevant, and appropriate sources, such as your course text, texts from previous taxation courses, or current IRS publications. If you require help with research, writing, and citation, access the library or review library guides.
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