Assignment: Constructive Dividends, Redemptions, and Related Party Losses
1. Write a three to four page paper in which you:
Based on your research and the facts stated in the scenario, prepare a recommendation for the client in which you advise either acceptance of the proposed adjustments or further appeal of the issue based on the potential for prevailing on appeal.
2. Create a tax plan for the future redemption of the client's stock owned in the construction company that will not be taxed according to Section 301 of the IRC.
3. Propose a strategy for the client to receive similar amounts in compensation in the future and avoid the taxation as a constructive dividend.
4. Use the six step tax research process, located in Chapter 1 and demonstrated in Appendix A of the textbook, to record your research for communications to the client.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student's name, the professor's name, the course title, and the date.