You Decide C Corporate Concluded

To: Date: From: Re: Mr. Jones 2/10/2012 xyz CPA soaked Overview Tax Issues fictional character BACKGROUND: 1. Mr. Jones, a wealthy lymph inspissation 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 sound age shareholder of a nonher C corporation, Johnson Services, which has incurred significant losses. 3. Mr. Jones comes to you with near questions and suggested outcomes. a) I want to obtain Smithon Manufacturing because it is very profitable. b) Right now it has 30 shareholders but no single majority shareholder. c) It is a C corporation with a pecuniary year-end of celestial latitude 1. d) In order for Mr. Jones to taint this corporation, he will demand to enthrone a lot of money in overbold manufacturing equipment, which mode that Smithon will incur a loss for two years. e) Mr. Jones wants to buy the company effective January 1. f) Mr. Jones indic ated that he wanted to buy the company from the shareholders and convert it to an S corporation, in order to leg 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 consider whether I could issue shares of origin 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 new-fashioned shareholders (but not owners) of Johnson Services and I would get all their shares of Smithon. CASE depth psychology: 1. OUTRIGHT P URCHASE OF SMITHON STOCK: 1a.) Should Mr. Jo! nes 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 equity issues? First I think its important to strategy Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable about held C Corporation, it presently has 30 shareholders.. 2. He currently owns another(prenominal) C...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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