You Decide C Corporate Concluded

To: Date: From: Re: Mr. Jones 2/10/2012 xyz CPA solid Overview Tax Issues subject field BACKGROUND: 1. Mr. Jones, a wealthy lymph customer 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 effective age shareholder of a nonher C corporation, Johnson Services, which has incurred significant losses. 3. Mr. Jones comes to you with some(a) questions and suggested outcomes. a) I want to obtain Smithon Manufacturing because it is very profitable. b) Right direct it has 30 shareholders but no single majority shareholder. c) It is a C corporation with a financial year-end of celestial latitude 1. d) In order for Mr. Jones to obtain this corporation, he will postulate to enthrone a lot of money in freshly manufacturing equipment, which mode that Smithon will incur a loss for cardinal years. e) Mr. Jones wants to buy the company effective January 1. f) Mr. Jone s indicated that he wanted to buy the company from the shareholders and convert it to an S corporation, in order to send-off 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 figure whether I could issue shares of rake 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 in the buff 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 uprightness issues? First I think its important to muster in Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable near held C Corporation, it presently has 30 shareholders.. 2. He currently owns other C...If you want to get a full essay, order it on our website: BestEssayCheap.com

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