Instructions: Memos should be written in standard tax memo format. It should include a summary of facts, issue(s), law & analysis, and conclusion. The memo should not be longer than two pages. You must include a copy of the tax code(s), regulations, letter rulings, and/or cases used to support your work. Your response will be graded for technical content and writing skills. Technical content will be evaluated for information that is helpful to the intended audience and clearly relevant to the issue. Writing skills will be evaluated for development, organization, and the appropriate expression of ideas in a professional correspondence.

Memo #4

Your firm has a new individual client, Carla Navarro, and you have been assigned to prepare her current year tax return. Upon review of Carlas tax returns from prior year, you notice that she reported a large capital gain from a stock redemption in 2021. Upon further investigation, you determine that stock in the corporation was owned by some of Carlas family members at the time of the redemption and the only way the redemption would have qualified for sale or exchange treatment is if Carla had availed herself of the family attribution waiver for a complete termination redemption. You establish the redemption terminated Carlas direct stock ownership in the corporation, she had no interest in the corporation since the redemption, and that she retained all records pertaining to the redemption. However, you cannot find any evidence the notification agreement required for family attribution waiver was properly filed. When asked about the missing agreement, Carla indicated she knew nothing about any required agreement and if such an agreement was required, her previous CPA should have filed it. Your partner has asked you to research whether Carla is still eligible to file an effective family attribution waiver agreement.

In a memo, summarize the results of your research. You may use tax code(s), regulations, letter rulings, and/or case law to support your conclusion.