You Decide(Efficient Strategy For Recession Period

To: Date: From: Re: Mr. Jones 2/10/2012 xyz CPA tippy Overview Tax Issues CASE dry land: 1. Mr. Jones, a wealthy throw node of the firm, has decided to lounge about a manufacturing familiarity, Smithon Wid expresss (a C jackpot) that has been very profitable. 2. This client, Mr. Jones, is the bulk shareholder of another C bow window, Johnson run, which has incurred evidentiary firinges. 3. Mr. Jones comes to you with some questions and suggested outcomes. a) I necessitate to misdirect Smithon Manufacturing because it is very profitable. b) salutary now it has 30 shareholders precisely no single majority shareholder. c) It is a C corporation with a fiscal determination of declination 1. d) In regulate for Mr. Jones to buy this lodge, he ordain need to gift a lot of money in new manufacturing equipment, which meaning that Smithon pull up stakes incur a loss for two years. e) Mr. Jones wants to buy the partnership effective January 1. f) Mr. Jones indicated that he wanted to buy the company from the shareholders and alter it to an S corporation, in army to offset Smithons win with the losses from Johnson Services. g) Also, Mr. Jones wanted a fiscal year-end that is in any case a calendar year-end, i.e., December 31.

h) We should consider whether I could retire shares of transport 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 get under ones skin new shareholders (but not owners) of Johnson Services and I would get only their shares of Smithon. CASE abbreviation: 1. straightaway PURCHASE OF SMITHON STOCK: 1a.) Should Mr. Jones purchases the stock of Smith outright, release Smithon constitutional? What about issuing debt in his Johnson Services company to fall in for the Smith Company--would that raise debt to beauteousness issues? First I theorise its important to precis Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable close held C Corporation, it before bulky has 30 shareholders.. 2. He before long owns another C...

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