Tax Research

Tax Research 5,7

1.      Briefly (and simply) explain why a corporation cares whether a payment is classified as a dividend payment or compensation payment (for its tax purposes).

2.      Briefly (and simply) explain why a corporate employee/owner cares whether a payment is classified as a dividend payment or compensation payment (for his/her tax purposes).

3.      Find and refer to the case, at (87 AFTR 2d 2001-2075) , what Method of Accounting?

4.      What was the issue related to IRC §§162 & 316 in this case?

5.      Briefly explain how the Pepsi-Cola case affected the decision in this case on that issue.

6.      Briefly list the three main conditions under §355 that allow a distributee to avoid the recognition of gain or loss on the distribution of stock of a controlledcorporation.

7.      Refer to Rev. Rul. 77-11 for questions 2-5. What (not how much) were corporation X's assets immediately after the transfer to corporation Z?