Two Essays – Accounting
Option #1: Section 351 Requirements
Sara and Mark transferred property to Owl Corporation in exchange for two-thirds of its stock. For services rendered, Alex received the remaining one-third of the stock. Explain whether the exchanges will be taxable in the context of Section 351 and describe several steps which could be taken to mitigate tax liability.
Submission Requirements
- Your well-written answer should be 3 pages in length, not including the required cover and references pages.
- Be sure to discuss and reference concepts taken from the assigned textbook reading and relevant research.
- Support your paper with at least four to six tax, scholarly, legislative, or court references (of which the textbook may be one). The CSU-Global Library and RIA Checkpoint are good places to find these references.
- Format your answer according APA.
- Review the grading rubric to see how you will be graded for this assignment.
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Option #2: Section 338 Election and Stock Acquisition
Pursuant to an election under Section 338, Lemon Corporation acquires stock and, in conjunction with the stock seller, elects to treat the stock purchase as an asset acquisition. Prepare a letter to Lemon Corporation in which you answer the following:
- How this choice is permissible under Section 338, including the specific subsection applicable to this scenario;
- How the deemed asset sale should be reported on the target company’s consolidated income tax return; and
- Why Lemon Corporation would choose to treat the acquisition this way (what benefit do they stand to gain?).
Submission Requirements
- Your well-written answer should be 3 pages in length, not including the required cover and references pages.
- Be sure to discuss and reference concepts taken from the assigned textbook reading and relevant research.
- Support your paper with at least four to six tax, scholarly, legislative, or court references (of which the textbook may be one). The CSU-Global Library and RIA Checkpoint are good places to find these references.
- Format your answer according APA
- Review the grading rubric to see how you will be graded for this assignment.
