Posted: July 30th, 2015

Reorganizations and Consolidated Tax Returns

Reorganizations and Consolidated Tax Returns

Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two (2) subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of a Type A, C, or D reorganization over a Type B reorganization. Additional facts regarding the issues are reflected below.

The company currently files a consolidated income tax return with the two (2) subsidiaries acquired through a Type B reorganization.
ABC Corporation, a subsidiary targeted by the client for takeover, has substantial net operating losses.
XYZ Corporation and BB Corporation will be acquired as subsidiaries in the next six (6) months.
Use the Internet and Strayer databases to research the rules and income tax laws regarding Types A, B, C, and D reorganizations and consolidated tax returns. Be sure to use the six (6) step tax research process in Chapter 1 and demonstrated in Appendix A of your textbook as a guide for your written response.

Write a four to six (4-6) page paper in which you:

1.Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client.
2.Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response.
3.Propose a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.
4.Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and provide a recommendation to your client. Support the recommendation with applicable research.
5.Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group.
6.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.
Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the students name, the professors name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:

Prepare client, internal, and administrative documents that appropriately convey the results of tax research and planning.
Evaluate tax-planning strategies related to liquidating distributions, acquisitions, and reorganizations.
Create an approach to tax research that results in credible and current resources.
Research and analyze tax issues regarding consolidated tax returns.
Use technology and information resources to research issues in organizational tax research and planning.
Write clearly and concisely about organizational tax research and planning using proper writing mechanics.
Click here to view the grading rubric for this assignment.

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Added on 29.07.2015 17:54
6.Use the six (6) step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.
In both open- and closed-fact situations, the tax research process involves six basic steps:

Determine the facts.

Identify the issues (questions).

Locate the applicable authorities.

Evaluate the authorities and choose those to follow where the authorities conflict.

Analyze the facts in terms of the applicable authorities.

Communicate conclusions and recommendations to the client

PLEASE USE THIS RUBRIC TO WRITE THE PAPER
Grading for this assignment will be based on answer quality, logic / organization of the paper, and language and writing skills, using the following rubric.

Points: 250

Assignment 3: Reorganizations and Consolidated Tax Returns

1. Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client.

Weight: 15%

Did not submit or incompletely compared the long-term tax benefits and advantages of each type of reorganization, and did not submit or incompletely recommended the type of reorganization that will be most beneficial to the client.

Partially compared the long-term tax benefits and advantages of each type of reorganization, and partially recommended the type of reorganization that will be most beneficial to the client.

Satisfactorily compared the long-term tax benefits and advantages of each type of reorganization, and satisfactorily recommended the type of reorganization that will be most beneficial to the client.

Thoroughly compared the long-term tax benefits and advantages of each type of reorganization, and thoroughly recommended the type of reorganization that will be most beneficial to the client.

2. Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response.
Weight: 10%

Did not submit or incompletely suggested the type of reorganization the client should use for the ABC Corporation based on your research. Did not submit or incompletely justified the response.

Partially suggested the type of reorganization the client should use for the ABC Corporation based on your research. Partially justified the response.

Satisfactorily suggested the type of reorganization the client should use for the ABC Corporation based on your research. Satisfactorily justified the response.

Thoroughly suggested the type of reorganization the client should use for the ABC Corporation based on your research. Thoroughly justified the response.

3. Propose a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client.

Weight: 15%

Did not submit or incompletely proposed a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Did not submit or incompletely assessed the value of a taxable transaction over a nontaxable reorganization for the client.

Partially proposed a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Partially assessed the value of a taxable transaction over a nontaxable reorganization for the client.

Satisfactorily proposed a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Satisfactorily assessed the value of a taxable transaction over a nontaxable reorganization for the client.

Thoroughly proposed a taxable acquisition structure for the clients planned acquisitions over a nontaxable reorganization. Thoroughly assessed the value of a taxable transaction over a nontaxable reorganization for the client.

4. Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and p