ESSAYS POWERED BY

Corporation Essay

Words: 2369

Pages: 10

Open Document

To: Shahab Razani, Tax Partner
From: Chinonso Nwogu, Tax Advisor
Date: January 3, 2014
RE: Tax Consequences and Compliance of Assets Acquisition

FACTS
On December 1, 2012, Environmental Solutions Inc., (“Environmental”) offered to buy Joel Freedman’s (“Freedman”) company, Advanced Technologies. After discussing the offer with his attorney, he accepted to sell his company on August 1, 2013. On August 15, 2013, attorneys from both companies signed a letter of intent to acquire Advanced Technologies assets and liabilities for $5million. On September 30, 2013, the letter of intent was presented and approved by Environmental Solution’s board of directors. On October 15, 2013, the acquisition was completed and closed.
Freedman …show more content…
Per IRC 117, to determine whether the gain or loss from the sale of a business is ordinary or a capital gain, Advanced Technologies must first classify each individual asset sold as either (I) capital assets (IRC § 1231 Assets); or (II) property used in trade or business; or (III) Other property (ordinary income assets) such as inventory or stock in trade.7 Aaron Williams v. George McGowan 152 F.2d 570 (CA-2, 1945) held that the sale of a sole proprietorship cannot be treated as a unified “capital assets” because each assets of a sole proprietorship under its classification is not a capital asset. Assets like Account Receivables and Inventory are considered ordinary income assets and the gains and losses realized are treated as either ordinary gain or loss.8
Capital Assets are defined as any asset that is a personal or real property with a value greater than or equal to the capitalization threshold for certain classified asset with an estimated life of more than one year.9 Building, patent and goodwill should be classified by Advanced Technologies as capital assets. Each individual asset based on the classification listed above is allocated using the fair market value realized. An ordinary income asset is classified as a “noncapital asset” and any realized amount from the sale

A Corporation Is The Way

A CORPORATION IS THE WAY A Corporation is the Way Esteban Maldonado A CORPORATION IS THE WAY Abstract This is a management decision that has been made through research on a Corporation. By comparing a sole proprietorship, partnership, and a Corporation, the decision has been made to go with a Corporation. A CORPORATION IS THE WAY A Corporation is the Way A Corporation was the best decision to make to open a new production company. It has been very useful by many…

Words 361 - Pages 2

Xyz Corporation

XYZ CORPORATION ECON 220 -1201A-42- IP 2 Darryl Gamble AIU Abstract I have been asked to do a special report on the feasibility of XYZ Corporation remaining open even though they are losing money. Also discussed will be the point where XYZ Corporation should either downsize or completely shut down. I have taken the liberty of putting together a chart which will show you the breakdown at two different levels of fixed costs. At 1,000…

Words 553 - Pages 3

Analysis: The Corporation

Ethics The Corporation The Corporation, a documentary about how people view businesses as punitive corporations performing injustice actions towards society, holds a valid fact about our fluctuating business society. A corporation is defined, in the movie, as “a group of individuals who work together to serve a variety of objectives; the principal one of which is earning large, growing, sustained, and legal returns for who owns the business.” This definition clearly explains how a corporation should…

Words 525 - Pages 3

The Purpose Of Corporation

of the Corporation? According to Milton Friedman, “The Purpose of a corporation is to make profits for its shareholders.” There are many aspects of a corporation, however, the topics in which I will cover consist of Friedman’s views and arguments concerning social responsibility of a business, morals responsibilities of business managers, Freeman’s issues with Friedman’s views, touching on a few case studies to relate, how corporations make society better, tasks in which corporations fail to…

Words 1174 - Pages 5

Capitalism and the Corporation Essay

The problem to be investigated is the development of the corporation and the ever evolving role it plays in different societies. This paper will attempt to address this by researching the history of the corporation, the difference between European, British, and U.S. corporations, the definition of stakeholders, and the effects of social democracy on capitalism. By definition, a corporation is a fictitious legal person separate from the people that formed it and its existence can be traced back to…

Words 1482 - Pages 6

Whirlpool Corporation Essay

Whirlpool Corporation—Giving ERP a Spin1 Introduction Whirlpool Corporation is one of the world’s leading manufacturers and marketers of major home appliances. The company has principal manufacturing operations and marketing activities in North and South America, Europe, and Asia. Whirlpool’s primary brand names—KitchenAid, Roper, Bauknecht, Ignis, Brastemp, Consul, and its global Whirlpool brand—are marketed in more than 170 countries worldwide. In North America, Whirlpool is the largest supplier…

Words 3006 - Pages 13

Chester Corporation Essays

Chester Corporation Chester Corporation is in the manufacturing and production of sensors for technology use. Sensors are devices that observe physical conditions in technology. Chester is composed of four key senior managers that are responsible for the companies operating decisions. Drew Brown is the head of Research and Development. Drew’s responsibilities for Chester are to design the product line and to invent and revise products to keep them appealing for customers needs. Mariah Klenke is…

Words 753 - Pages 4

Loctite Corporation Essay

Executive Summary Loctite Corporation should introduce the new adhesive system Bond – A – Matic 2000 (BAM) as complementary product to the SuperBonder adhesive line. The target customers are plant managers in companies using more than 1 lbs. of instant adhesive per year. Loctite should employ a direct mailing campaign for BAM’s marketing efforts. The new adhesive system will support the company’s strategies to capture 35% of the CA market with the SuperBonder line. Customer Analysis 1. Market…

Words 2349 - Pages 10

Jameston Corporation Essay

Jameston Corporation is a pharmaceutical company that produces different types of drugs. During 1990 it developed an antidepressant drug, Trizon. This drug contains the ingredient of “Selective serotonin reuptake inhibitors”, which inhibits the serotonin neurotransmitters in the brain. Issue #1 (a) Jameston Corporation, a pharmaceutical company introduced an antidepressant drug “Trizon” which provided not only relief but cured depression. However, its major content, serotonin has been proven…

Words 3666 - Pages 15

Sands Corporation Essay

SANDS CORPORATION WRITTEN ANALYSIS AND COMMUNICATION (WAC) NISHANT GADIA FSB-1 26TH August 14 SANDS CORPORATION LETTER OF TRANSMITTAL August 9, 1961 President, Sands Corporation Clairmont, USA Dear Sir, Enclosed is the report on “The Establishment of New plant”. This report examines the problems, options available and the different scenarios dealt with. Various factors have been taken into consideration for an attempt to take a wiser decision. I hope you find this report satisfactory…

Words 1075 - Pages 5