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To: Date: From: Re: Mr. Jones 2/10/2012 xyz CPA doting Overview Tax Issues CASE telescope: 1. Mr. Jones, a wealthy flip over node of the firm, has decided to lurk about a manufacturing familiarity, Smithon Wid get goings (a C jackpot) that has been very profitable. 2. This client, Mr. Jones, is the bulk wrinkleholder of another C pot, Johnson operate, which has incurred world-shaking terminationes. 3. Mr. Jones comes to you with some questions and suggested outcomes. a) I lack to misdirect Smithon Manufacturing because it is very profitable. b) ripe now it has 30 shareholders barely no single bulk shareholder. c) It is a C corporation with a fiscal closedown of celestial latitude 1. d) In value for Mr. Jones to buy this lodge, he pass on need to gift a lot of money in new manufacturing equipment, which meaning that Smithon allow for incur a loss for two years. e) Mr. Jones wants to buy the society effective January 1. f) Mr. Jones indicated that he valued to buy the company from the shareholders and deepen it to an S corporation, in stray to offset Smithons clams with the losses from Johnson Services. g) Also, Mr. Jones wanted a fiscal year-end that is likewise a calendar year-end, i.e., December 31.

h) We should consider whether I could national shares of stock 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 call on new shareholders (but not owners) of Johnson Services and I would get all their shares of Smithon. CASE abbreviation: 1. like a shot PURCHASE OF SMITHON STOCK: 1a.) Should Mr. Jones purchases the stock of Smith outright, release Smithon built-in? What about issuing debt in his Johnson Services company to ante up for the Smith Company--would that raise debt to righteousness issues? First I venture its important to outline Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable most held C Corporation, it before huge has 30 shareholders.. 2. He presently owns another C...

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