Firm HR is about to implement an aggressive long-term strategy consisting of three phases. It is crucial to the success of the strategy that the IRS accepts Firm HR’s interpretation of the tax consequences of each distinct phase. The firm could implement the first phase in November 2019 and the second phase in August 2020. Alternatively, it could delay the second phase until January 2021. Identify the tax issue or issues suggested by the following situations, and state issue in the form of a question.