Tax Week 6 Analysis

Current 2007 Base Scenario 1 110,000,000 110,000,000 110,000,000 1.0% 1% 1.2% 1,100 1,100 1,320 $2.00 $1,80 $1,80 $2,200 $0 $0 2,016 2,016 2,016 52 52 52 $230,630,400 $0 $0 $0 $0

Parent Corporation owns 85% of the common stock and 100% of the preferred stock of Subsidiary Corporation. The common stock and preferred stock have adjusted bases of $500,000 and $200,000, respectively, to Parent. Subsidiary adopts a plan of liquidation on July 3 of the current year, when its assets have a $1 million FMV. Liabilities on that date amount to $850,000. On November 9, Subsidiary pays off its creditors and distributes $150,000 to Parent with respect to its preferred stock. No cash remain to be aid to Parent with respect to the remaining $50,000 of its liquidation preference for the preferred stock, or with respect to any common stock. In each of Subsidiary’s tax years, less than %10 of its gross

4) Explain the differences between statutory and ordinary income. Give examples of either category in your answer.

Account W/P Common Common # Title Ref. Balance Size Balance Size Amount Percentage REVENUE 40000 Sales 246,172,918.44 102.33% 245,213,452.88 106.40% -959,465.56 -0.39% 41000 Sales Returns 4,497,583.20 1.87% 13,600,220.89 5.90% 9,102,637.69 202.39% 42000 Warranty Exp 1,100,281.48 0.46% 1,158,128.47 0.50% 57,846.99 5.26% Net Sales 240,575,053.76 100.00% 230,455,103.52 100.00% (10,119,950.24) -4.21% EXPENSES 50000 COGS 141,569,221.61 58.85% 130,246,645.26 56.52% (11,322,576.35) -8.00% Gross Margin 99,005,832.15 41.15% 100,208,458.26 43.48% 1,202,626.11 1.21% GA-7.4

(3) What amount of loss is allocable to the limited partner, Dr. Ashin, in this taxable year?

IRS is proposing to update the administrative appeals process for cases in tax court. These new procedures are designed to make easier consideration by the IRS appeals office. The Chief Counsel’s office must refer to the case of Appeals within 30 days of the case becoming “at issue in the Tax Court” unless with the manager’s approval of the Chief Counsel’s office identifies the need for extra time. This notice contains a number of procedures designed to allow the Appeals office to continue the settlement of cases while cooperating with the Chief Counsel’s office to help trial preparation. This procedure won’t apply to the innocent spouse Tax Court petitions under Sec. 6015(e)(1)(A)(i)(II), cases involving levies and various judgment proceedings

It often happens that we get so caught up with everyday life and forget some of the most important tasks such as filing your taxes on time. If you've been procrastinating or forget to plan your taxes, you might need to consider filing an extension. If you need more time to file your tax return here's all you need to know about filing an extension.

The net tax gap is this amount less tax paid late or collected by the IRS through enforcement mechanisms. Both the gross and net tax gaps can be subdivided into the three main components as the return non-filing, the income under-reporting, and the under payment gap. The under reporting gap is in turn made up of three rudiments- under reported income, over stated rebates/ reductions and net arithmetical mistakes in income tax return. Income tax law must accommodate fair administrative procedures, tax decisions and as well as appeal options but it all depends on substantial readiness of tax compliance on taxpayers. Efficient tax machinery involves actions to engage tax payers to comply willingly, without the need for enquiries,

The presumption of Plato’s view is a sound and fair idea; that is to say, if there is an opinion stated without thorough subject experimentation or logical education, an opinion could be an auspicious speculation. For instance, if one was asked the opinion what the person thought about tax write-offs, they began stating their opinion about how terrible it is for people to have tax write-offs, how horrible these business owners, freelancers, etc. are because they are for not paying proper taxes, it’s not right they say. The origination of this conviction could have come from the media or friends, the opinions could end up being inconsistent because the opinion given is not consistent with the legal tax rules. To clarify, the opinion holder against

The tax gap is the difference between the tax collected and the tax that would be collected if all individuals and

D | 12 | 7.11 | E | 10 | 1.00 | F | 6 | 0.44 | G | 8 | 7.11 | H | 6 | 0.44 | I | 7 | 2.78 | J | 4 | 0.11 | K | 4 | 0.44 | Total Expected time 76 weeks Activity | ES | EF | LS | LF | Slack | Critical |

On November 9 the Senate Republicans unveiled a tax plan that will reduce individual tax rates across the board and will bring relief to low and to middle income families. It will bring down corporate tax rates. It will modernize the international tax system. “It's a great day in moving in the right direction for middle income tax cuts,” says Steve Mnuchin.

Jane’s cash outflow: $1,000 + $500 + $800 + $355 + $280 + $1,200 + $222 = $4,357

|Turnover |Inventory turnover|Cost of good sold/ |115000 / 5846= |138148 / 9887= |135540 / 8273= |

Computer Company E’s Intangibles represent 0.0% of its total assets, while Computer Company F’s Intangibles are 1.2% of its total assets. Intangibles like patents (for highly differentiable devices) and a company brand (led by its charismatic founder) have value. I believe Computer Company F is Company 2.