Tax Research Problem- Section 351

Using a memo format, prepare a professional response to the Tax Research Problem below:

IN AN EXCHANGE QUALIFYING FOR SEC. 351 TAX-FREE TREATMENT, GRETA RECEIVES 100 SHARES OF WHITE CORPORATION STOCK PLUS A RIGHT TO RECEIVE ANOTHER 25 SHARES. THE RIGHT IS CONTINGENT ON THE VALUATION OF A PATENT CONTRIBUTED BY GRETA. BECAUSE THE PATENT IS LICENSE IS PENDING, THE PATENT CANNOT BE VALUED FOR SEVERAL MONTHS.

PREPARE A MEMORANDUM FOR YOUR TAX MANAGER EXPLAINING WHETHER THE UNDERLYING 25 SHARES ARE CONSIDERED “STOCK” FOR PURPOSES OF SEC. 351 AND WHAT TAX CONSEQUENCES ENSUE FROM GRETA’S RECEIPT OF THE 100 SHARES NOW AND 25 SHARES LATER UPON EXERCISE

1. Appropriate header: Taxpayers name and date of meeting, which should be the assignment submission date.

2. Facts about the case study, including a summary of current developments (i.e., issues).

3. An analysis of the case scenario, including the applicable federal taxation implications of the concepts and laws related to the issues.

4. Description of recommendations to the client on the consequences of the transaction.

The memo should be between 500-750 words and present the following sections in the following order: Facts, Issues, Conclusion, and Discussion. Attached is a memo template which can be used.

While APA style is not required for the body of this assignment, solid academic writing is expected, and documentation of sources should be presented using APA formatting guidelines,

This assignment uses a rubric. Please review the rubric prior to beginning.

Answer preview:

word limit:628