Question
5. What planning engagements can the tax professional offer? Why is he or she in an ideal position to offer these services? 6. Summarize the
5. What planning engagements can the tax professional offer? Why is he or she in an ideal position to offer these services?
6. Summarize the most important planning services that a tax professional can offer to a client.
7. When might a taxpayer undertake transactions seemingly opposite to the usual tax planning principles?
8. On creating a new 100 percent-owned corporation, Ben was advised by his tax consultant to treat 50 percent of the total amount that was invested as a loan and 50 percent as a purchase of corporate stock. What tax advantage does this arrangement have over structuring the entire investment as a purchase of stock? Explain.
9. George, a high-bracket taxpayer, wishes to shift some of his own taxable income from corporate bonds he owns to his 25-year-old daughter, Debra, so that Debra rather than George is taxed on the interest. One alternative is to make a gift of the interest, and the other is to make a gift of the bonds themselves. Evaluate the pros and cons of each alternative.
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