Tax 655 – Summer 2014 Page 1 of 2

Assignment – MEMO 10% of your grade

Please read the directions below and then select ONE of the situations described on page 2 to write your memo.

DIRECTIONS:

There are 3 different situations you can choose from (see page 2) to write your memo. I will only read one situation, so please choose only one. Your memo should be NO Longer than 750 words (500 words is ideal – hint! Hint!). I will not read beyond 750 words (not including bibliography if listed separately).

Use the references provided (for the situation selected) to prepare your client memo. You can use any other reference materials you wish, but please address the tax issues in the reference material listed for the situation you select. Please provide a bibliography with the references used if they are not listed in the memo.

Your memo needs to include three items - the facts, the tax issues, and your recommendation (in your own words). See Comprehensive (appendix) A-6 of your text book for an example of a memo. You can use the A-6 format of Facts, issues, applicable law, analysis, and conclusion. You may add your own facts to the choosen situation… But make sure you address the tax issues provided in the reference materials for the situation you have chosen.

Use quotation marks and list the source if you are quoting from reference materials.

Each situation can have multiple correct answers depending on the facts. If necessary, clarify the facts to support your recommendation.

Your paper should be typed (not hand written) and double-spaced.

Understand that in taking this course, your assignments may be submitted to turnitin.com or other plagiarism-detection services and reviewed for textural similarity suggestive of plagiarism (please see the academic honesty policy of SNHU for more information).

CHOOSE ONE OF THE FOLLOWING SITUATIONS TO WRITE YOUR MEMO:

  1. Barry a real estate developer wants to form a corporation to conceal his (or her) identity.

Use the following Supreme Court case to identify the tax issues and suggest a recommendation: Commissioner v. Bollinger, Supreme Court of the United States, 1988, 485 U.S. 340

  1. Lunar a closely held corporation owes money to one of it’s shareholder employees Mo. Mo has decided to discontinue the business and wants to write off the loans as a bad debt expenseher personal tax return.

Use the following Supreme Court case to identify the tax issues and make a recommendation: United States v. Generes, Supreme Court of the United States, 1972, 405 U.S. 93

Other references: Internal Revenue code sections 165(g)(1),(2); section 166(a), (b), (d), (e); section 1244; section 1271(a)(1); Regulations section 1.166-5

  1. Joe owns 100% of Coffee corporation. Coffee wants to purchase a piece of land for commercial development in a joint venture with Joes daughter Ilene. Coffee makes a down payment and borrows the funds from a local bank. An option agreement (which expires in one year) is given to Ilene so she can purchase ½ the property for $50,000.00.

Use the following court case to identify the tax issues and suggest a recommendation. Baumer v. United States, United States Court of Appeals, Fifth circuit, 1978, 580 F.2d 863

Other references: Internal Revenue Code sections 61(a)(7), section 301(a), (b), section 316(a); 317(a), Regulations section 1.301-1(c),(j), (m).