Hi Team, I met with Paul Bunya yesterday. Paul is considering changing CPA firms and has asked us to review a proposed transaction that his prior CPA firm has suggested. I will need you to research proposed transaction and determine the tax consequences and possibly suggest an alternative that would result in greater tax advantages, if possible. The following are the facts as Paul presented to me. Paul is a well-known commercial real estate broker. He negotiates deals on behalf of his clients, but also maintains a portfolio of property of his own, including mostly raw, unimproved land that he holds as investment property, or for sale. Included in Paul's portfolio is a large unimproved parcel of land that he acquired several years ago for $750,000. After he acquired the property, he had it surveyed and, unfortunately, it was determined that this property is located on the San Andreas Fault. As you are likely aware, it forms the tectonic boundary between the Pacific Plate and the North American Plate. That said, the value of this property is now determined to be less than what Paul paid for the property four years ago. Recently, Dan McKenzie, a well-known tectonic architect and Alfreda Weg, a builder know for constructing homes along Fault lines, contacted Paul about possibly developing the parcel of land. Dan and Alfreda have suggested the three collaborate in developing this property into residential homes. Dan and Alfreda have used state-of-the-art technology recently to design homes that will not be impacted by the tectonic fault lines. However, Dan and Alfreda are also aware that the value of this property is less than Paul originally paid, given it was discovered that it is located along this Fault line. The current value of this tract is closer to $500,000. Paul, Dan and Alfreda have proposed organizing a corporation to begin developing the residential housing project. Each of the three would receive stock in exchange for his or her property that they transfer or services they perform. However, Paul consulted with his prior Firm regarding this transaction and they suggested, and Paul agreed, to join the corporation if the transfer of the land is structured as a sale to the corporation. Rather than receiving stock in exchange for the property, he would take back a $500,000, 5-year interest-bearing note from the newly formed corporation. Paul wants us to research the tax consequences of this arrangement suggested by his prior CPA Firm. In addition, Paul would like us to evaluate the tax consequences if Paul were to transfer the property in exchange for stock in the proposed new corporation. I have told Paul we would get back to him soon. Therefore, I will need you to provide me with a Tax Memorandum on or before April 26, 2021 at 11:59 PM EST. Respectfully, Hi Team, I met with Paul Bunya yesterday. Paul is considering changing CPA firms and has asked us to review a proposed transaction that his prior CPA firm has suggested. I will need you to research proposed transaction and determine the tax consequences and possibly suggest an alternative that would result in greater tax advantages, if possible. The following are the facts as Paul presented to me. Paul is a well-known commercial real estate broker. He negotiates deals on behalf of his clients, but also maintains a portfolio of property of his own, including mostly raw, unimproved land that he holds as investment property, or for sale. Included in Paul's portfolio is a large unimproved parcel of land that he acquired several years ago for $750,000. After he acquired the property, he had it surveyed and, unfortunately, it was determined that this property is located on the San Andreas Fault. As you are likely aware, it forms the tectonic boundary between the Pacific Plate and the North American Plate. That said, the value of this property is now determined to be less than what Paul paid for the property four years ago. Recently, Dan McKenzie, a well-known tectonic architect and Alfreda Weg, a builder know for constructing homes along Fault lines, contacted Paul about possibly developing the parcel of land. Dan and Alfreda have suggested the three collaborate in developing this property into residential homes. Dan and Alfreda have used state-of-the-art technology recently to design homes that will not be impacted by the tectonic fault lines. However, Dan and Alfreda are also aware that the value of this property is less than Paul originally paid, given it was discovered that it is located along this Fault line. The current value of this tract is closer to $500,000. Paul, Dan and Alfreda have proposed organizing a corporation to begin developing the residential housing project. Each of the three would receive stock in exchange for his or her property that they transfer or services they perform. However, Paul consulted with his prior Firm regarding this transaction and they suggested, and Paul agreed, to join the corporation if the transfer of the land is structured as a sale to the corporation. Rather than receiving stock in exchange for the property, he would take back a $500,000, 5-year interest-bearing note from the newly formed corporation. Paul wants us to research the tax consequences of this arrangement suggested by his prior CPA Firm. In addition, Paul would like us to evaluate the tax consequences if Paul were to transfer the property in exchange for stock in the proposed new corporation. I have told Paul we would get back to him soon. Therefore, I will need you to provide me with a Tax Memorandum on or before April 26, 2021 at 11:59 PM EST. Respectfully