You Decide C Corporate Concluded

To: Date: From: Re:

Mr. Jones 2/10/2012 xyz CPA firm Overview Tax Issues

CASE BACKGROUND:
1. Mr. Jones, a wealthy lymph node 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 legal age shareholder of a nonher C corporation, Johnson Services, which has incurred significant losses. 3. Mr. Jones comes to you with some 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 fiscal year-end of December 1. d) In order for Mr. Jones to buy this corporation, he will need to enthrone a lot of money in new 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 indicated that he wanted to buy the company from the shareholders and convert it to an S corporation, in order to offset 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 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 become new shareholders (but not owners) of Johnson Services and I would get all their shares of Smithon.

CASE depth psychology:
1. OUTRIGHT PURCHASE OF SMITHON STOCK: 1a.) Should Mr. Jones 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 outline Mr. Jones intentions. 1. He wants to purchase Smithon Widgets, a , very profitable closely held C Corporation, it presently has 30 shareholders.. 2. He currently owns another C...If you want to get a full essay, order it on our website: Ordercustompaper.com



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