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Tax Research Provide a slatement or advice letter addressed to client analyzina the question oresonted through relevant: 1) Code seclion, 21.IRC requlalion, 3) a case on point (with similar facls as in your question, NJ or Federal), and 4) a recent article Your response should be well organized and neatly presented. Make sure your answer includes the following: I. Clearly identify your topic and what it is you would like to learn 2. provide a copy of the code section(s) applicable to your question; 3. indicate how you learned which section applies; 4. provide a copy of an explanalory regulation (which includes an example of your problem); 5. provide a copy of a case which deals with your topic (NJ or Federal): 6. provide a copy of a recent article which deals with your topic (within the last 10 years); and 7. explain which on-line or olther resources you used to locate each of the above (code section, regulation, case and article), and provide informalion on how you navigaled through these resources. Part 2 Code Question Presented: Shelly is the president and the sole shareholder of Kane Corporation, stock basis Keaulatier$400,000). Incorporated in 2005, Kane's sole business has consisted of purchase and resale of used medical equipment. In December 2015, Kane transferred its entire inventory, basis of 1.2M to Shelly in a transaction described by the parties as a sale. According to Shelly and coillaborated by the minutes of the board of directors, the inventory was sold to her for $2 million, Its fair market value. The terms of the sale provided that Shelly would pay Kane $2 million at some future date. The debt obligation was not evidenced by a promissory note and to date, Shelly has made no payments, principle or interest, on the obligation. case anie fact ISsue Oith The inventory transfer was not reported on Kane's 2015 tax return, either as a sale or a distribution. After the transfer of the Inventory to Shelly, Kane Corporation had no remaining assets and ceased to conduct any business. Kane did not formally liquidate under state law. IRS audited Kane's 2015 tax return andi assessed the following: shuy matemfal foct as cloce as 1. Transfer of inventory constituted taxable liquidation distribution in the amount of $800,000 (2M-1.2M) IRS asserted entire tax liability of $800,000 agalnst Shelly based on transferee liability 3. IRS assessed tax due from Shelly for her gain recognized in the purported liquidating distribution Aactica 2. Shelly contacted you regarding IRS's determination. Prepare a memo documenting your research. What are the tax consequences to Kane? To Shelly? skelly Cadvice) Memo to waite a -the