Swot Analysis : Liquidating Distributions

If the Partnership makes a Distribution then BOTH the Capital Account and the Tax Basis are REDUCED by the amount of the Distribution.

Code Sec243 of the IRS provide relief to domestic corporations, when paying dividends to its shareholders, which is subject to tax. In another words, the relief is the paid dividend to others corporations, in which the income would be tax a third time after the recipient corporation pays dividend to its

1. All distributions (excluding reasonable salary) to Paula and Mary will be taxed as dividends to them. And the corporation could not deduct this part of distribution.

is just only if everyone is entitled to the holdings they possess under said distribution and that any

- Kasey does a wonderful job empathetically acknowledging the client all the way through this call. Great! Good initial empathy regarding the trouble with myql. She goes on to further empathetically acknowledge with the client about her slow internet connection. When the client needs to make a second attempt at creating her account, Kasey apologizes for the inconvenience.

I spoke with my boss about writing this paper and needing to find out more information about our company. He explained to me that we are a C Corporation. A c corporation is “subject to federal income tax based on its taxable income for the year, keeping in mind that a host of special tax credits (offsets) could reduce or even eliminate the amount of income tax a corporation has to pay.”

I to found SWOT analysis to be enlightening and useful in finding the strength and weakness of my company. Though, the ability to keep a forward looking attitude is very health, but understanding why failures happen is very important too. It may be a sign that people within that organization are miscommunicating with each other. Addressing this issues now may avoid future problems in the future.

According to INVESTOPEDIA the definition of the DuPont analysis is that “assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE)” (INVESTOPEDIA, 2003, pg.1). The DuPont analysis breaks down the return on equity into three parts. These three parts include: operating efficiency which would be measured by profit margin, assets and there use of efficiency which is measured by total asset turnover, and financial leverage which can be measured by equity multiplier (INVESTOPEDIA, 2003). The basic formula to measure the return on equity would be profit margin (profit/sales) X turnover (sales/assets) X equity multiplier (assets/equity).

First, the amount of any distribution shall be the amount of money received, plus the fair market value of the other property received (IRS 2016). Secondly, the amount that is taxable is the portion of a distribution which is a dividend is included in gross income, and that the remaining portion of the distribution is applied first against the adjusted basis of the stock and then is treated as gain from the sale or exchange of property (IRS 2016). Thirdly, the basis of the property received in a distribution shall be the fair market value of such property (Cornell 2016). Finally, the special rules applies to 20 percent corporate shareholder. “For purposes of this subsection, the term “20 percent corporate shareholder” means, with respect to any distribution, any corporation which owns, stock in the corporation making the distribution possessing at least 20 percent of the total combined voting power of all classes of stock entitled to vote, or at least 20 percent of the total value of all stock of the distributing corporation (except nonvoting stock which is limited and preferred as to dividends), but only if, but for this subsection, the distributes corporation would be entitled to a deduction under section 243 or 245 with respect to such distribution.” (Cornell 2016)

There are a few threats to this proposed business idea that I found through this analysis. There are comparable products being sold at others stores in the area. Retailers like Target, Sears and Wal-Mart have been able to get higher end clothing in their stores. With tough economic times customers may chose to shop at these retailers instead of

The Wal-Mart spirit is legendary, including things like the cheer ("Gimme a 'W ' …"), however that suits, perhaps, the American mindset better than, for instance, the European.

The corporation is ruled by the internal revenue Code where Subchapter C is the C Corporation and Subchapter S is the S corporation. Income on C Corporation is subject to double taxation; thus, the dividend distribution is not deductible by corporation. All corporations receive dividend where they treat them as ordinary income. Ordinary income can be allowed as dividend payment deduction. The tax treatment of dividend differs in corporation depending on the types of entity. According to the Internal Revenue Code § 316 “the term dividend means any distribution of property made by a corporation to its shareholders-out of its earnings and profits accumulated after February 28, 1913.” However, there are many different types of dividend such as Qualified Dividends, Property Dividends and Constructive Dividends.

The purpose of this paper is to help management must decide on the form of the dividend distribution, generally as cash dividends or via a share buyback. Various factors may be taken into consideration: where shareholders must pay tax on dividends, firms may elect to retain earnings or to perform a stock buyback, in both cases increasing the value of shares outstanding. Alternatively, some companies will pay "dividends" from stock rather than in cash.

After examining and observing the whole requirements of the projects strength, weakness, opportunities and threats are as follows:

According to What is SWOT Anlysis (2011), SWOT analysis is an analysis used to identify the internal factors (strengths and weaknesses) of the company as well as external factors (opportunities and threats) of the company.