Acc 455 Final Exams Essay

Whether all the shareholders must consent to the election of S status, under section 1362(a)(2)?

As for the combination of cash and new shares, shareholders can take part of their money

1) Section 351: Since Individual will be in control (80%+ ownership) of future corporation, he will not incur a taxable event

The appellants view the “substance” of the transaction is over the “form”. Generally, taxpayers are bound by the form of their transaction and may not argue the substance triggers different tax consequences. The Tax Court found the form and substance of the transaction was a loan from the bank to VAFLA and not to the appellants. The proceeds were to be used in the operation of the business and petitioners were not free to dispose the loan. Nor were the payments reported as constructive dividends.

b. it is necessary in certain circumstance weather there are no rules or rules do not apply or provide little guideline.

Regulation §1.704-1(b)(2) states that in determining whether a special allocation has a principal purpose of avoidance or evasion of Federal income tax, a facts and circumstances test must be considered. Such a test involves asking a series of questions

**c. If there is a conflict between a state statute and a federal statute, the federal statute

both a and b (Yes.  The corporate structure provides for limited liability and ease of transferring ownership.)

C. The question that the Supreme Court of the United States has to resolve is either to get rid of the “special circumstances,” meaning people who do know how to

There are situations where once the 351(a) factors are met, a transferor will transfer stock received to someone outside of the control group, and then the requirement after might not be met. A transferor might distribute some of the control received to the shareholders after the requirement based on 351(c). This type of distribution can be taxable to both the shareholders and the distributing

In Section 351(a), it states that “no gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control.” If we want to make qualified and successful transactions under Section 351 in order to make tax free transaction as it will not recognized and gain or loss, we will have to meet and satisfied the three lawful requirements to qualify non-recognition of gain or loss under Section 351. First, there have to be a property transfer. Second, there must be in exchange for common stock or preferred

Subchapter “J” of the Internal Revenue Code provides guidance for the treatment of Estates, Trusts and its beneficiaries as well as the income in respect to its decedents. It allows the researcher to determine if and when the income from a property is considered taxable to the estate, trust or its beneficiaries. It also imposes certain procedures for the Fiduciary ("26 U.S. Code Chapter 1, Subchapter J - Estates, Trusts, Beneficiaries, and Decedents")

d. Does it specifically target individuals and/or social groups as defined in Article 7 of the Convention?

(2) received directly its proportionate share of the income of such other corporation (26 U.S.C. § 1297(c)).”

Though it may not be open to a State legislature to make provision for the recovery of an amount which is not a tax under Entry 54 of List II in a law made for that purpose, it would still be open to the legislature to provide for paying over all the amounts collected by way of tax by persons, even though they really are not exigible as tax, as part of the incidental and