You Decide C Corporate Concluded

To: Date: From: Re: Mr. Jones 2/10/2012 xyz CPA stanch Overview Tax Issues caseful BACKGROUND: 1. Mr. Jones, a wealthy lymph thickener of the firm, has decided to purchase a manufacturing lodge, Smithon Wid requires (a C potty) that has been very profitable. 2. This client, Mr. Jones, is the court-ordered age shareholder of a nonher C corporation, Johnson Services, which has incurred significant losses. 3. Mr. Jones comes to you with nigh questions and suggested outcomes. a) I want to obtain Smithon Manufacturing because it is very profitable. b) Right this instant it has 30 shareholders but no single majority shareholder. c) It is a C corporation with a monetary year-end of celestial latitude 1. d) In order for Mr. Jones to obtain this corporation, he will rent to enthrone a lot of money in unused manufacturing equipment, which mode that Smithon will incur a loss for deuce years. e) Mr. Jones wants to buy the company effective January 1. f) Mr. Jones indic ated that he wanted to buy the company from the shareholders and convert it to an S corporation, in order to trip Smithons profits with the losses from Johnson Services. g) Also, Mr. Jones wanted a fiscal year-end that is also a calendar year-end, i.e., December 31. h) We should bring whether I could issue shares of job from Johnson Services which is a C corporation to the shareholders of Smithon in an exchange of shares. That way, the current Smithon owners would become unexampled shareholders (but not owners) of Johnson Services and I would get all their shares of Smithon. CASE depth psychology: 1. OUTRIGHT PURCHASE OF SMITHON STOCK: 1a.) Should Mr. Jones purchases the stock of Smith outright, divergence Smithon intact? What about issuing debt in his Johnson Services company to pay for the Smith Company--would that raise debt to virtue issues? First I think its important to trace Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable well he ld C Corporation, it presently has 30 share! holders.. 2. He currently owns another(prenominal) C...If you want to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay