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ACC 565 Week 7 Assignment 3 Reorganizations and Consolidated
Tax contains
Due Week 7 and worth 250 points
Suppose you are a CPA, and you have a corporate client that has been
operating for several years. The company is considering expansion
through reorganizations. The company currently has two (2) subsidiaries
acquired through Type B reorganizations. The client has asked you for
tax advice on the benefit of a Type A, C, or D reorganization over a
Type B reorganization. Additional facts regarding the issues are
reflected below.
The company currently files a consolidated income tax return with the
two (2) subsidiaries acquired through a Type B reorganization.
ABC Corporation, a subsidiary targeted by the client for takeover, has
substantial net operating losses.
XYZ Corporation and BB Corporation will be acquired as subsidiaries
in the next six (6) months.
Use the Internet and Strayer databases to research the rules and income
tax laws regarding Types A, B, C, and D reorganizations and
consolidated tax returns. Be sure to use the six (6) step tax research
process in Chapter 1 and demonstrated in Appendix A of your textbook
as a guide for your written response.
Write a four to six (4-6) page paper in which you:
Compare the long-term tax benefits and advantages of each type of
reorganization, and recommend the type of reorganization that will be
most beneficial to the client.
Suggest the type of reorganization the client should use for the ABC
Corporation based on your research. Justify the response.
Propose a taxable acquisition structure for the client’s planned
acquisitions over a nontaxable reorganization. Assess the value of a
taxable transaction over a nontaxable reorganization for the client.
Examine the value and limitations of including the ABC Corporation if
acquired as a wholly owned subsidiary in the consolidated return, and