Sample Case Study Paper: Advanced Taxation
Advanced
Taxation
Spring 2018
Case Study
Assignment
Sally
is a 25% partner in the STUV partnership.
She has a tax basis in her partnership interest of $300,000. Sally also owns some land and a small
building that she would like to sell to the partnership. The property has a fair market value of
$500,000. Sally purchased the building
for $400,000, and after taking MACRS deductions, her tax basis in the building
is $350,000.
Part
1
If
Sally sells the property to the partnership, what are the tax consequences to
Sally?
Sally’s
lawyer, who has a basic understanding of tax law, suggests that Sally should
contribute the building to the partnership, and subsequently take a
distribution of $500,000 from the partnership.
What are the tax consequences of this transaction?
Part
2
Do
you think the lawyer’s advice will work?
In reaching your conclusion please consult the Internal Revenue Code and
any other primary authority.
Part
3
Prepare
a memo explaining your reasoning in a clear concise manner citing appropriate
primary authority.
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