Question

In: Accounting

Subject Tax Accounting:1 Kodack is a begining tax researcher. He knows that the 1st step of...

Subject Tax Accounting:1

Kodack is a begining tax researcher. He knows that the 1st step of the research process is to get an understanding of the facts surrounding the transaction being researched. Describe the two basic types of facts, the sources of facts for a research project and any advice that may help Kodak.

Solutions

Expert Solution

Solution:-

There are two basic types of facts: open facts and closed facts. Open facts have not yet occurred,such as the facts associated with a proposed transaction. Closed facts have already occurred. Thedistinction between open and closed facts is important because unlike closed facts, open facts canbe altered, and different facts may result in very different tax consequences. Open facts allow thetaxpayer to arrange a transaction to achieve the most advantageous outcome. Thus, they areespecially important in tax planning.

There are several sources of facts for the typical research projects. Common sources includeinterviewing clients, speaking with third parties (e.g., attorneys, brokers), and reviewing client documents (contracts, prior tax returns, wills, trust documents, deeds, corporate minutes, etc.). When interviewing clients, you must remember that many clients are not tax experts. Thus, it is up to the tax researcher to ask the correct initial and follow-up questions to obtain all the relevant facts. Within a tax planning context, one shouold also consider non-tax factors, such as a client's personal values or objectives, as these often put constraints on tax planning strategies.


Related Solutions

Todd has been working on a tax research question for a client. He knows he will...
Todd has been working on a tax research question for a client. He knows he will be referring the issue to the client’s CPA and attorney, but he wanted to give the client some general information about how the issue could be handled and they wanted to discuss it together. Todd has found several private letter rulings, one court case, and a revenue ruling, all from 1980 or earlier that are contrary to what his client is trying to do....
Your best friend knows that you are currently taking an accounting class, and he comes to...
Your best friend knows that you are currently taking an accounting class, and he comes to you for some advice. He is interested in using his savings to purchase stock in a public corporation. He downloaded the annual report for two retail companies. He has the following questions about the two retail companies: What is typically included in each statement? Why do the statements appear in the following order? Income Statement Retained Earnings Statement Balance Sheet Cash Flow Statement What...
1. Once a firm knows that foreign demand exists, its next step is to a. use...
1. Once a firm knows that foreign demand exists, its next step is to a. use foreign direct investment. b. negotiate a licensing agreement with the foreign government. c. ascertain the lowest-cost method of supplying goods abroad. d. cease operations in its home country. 1b. Suppose that Samsung’s production costs are the same in both China and India. Also suppose that Samsung can produce cellphones in China for an average cost of $10 per phone for 300 million phones, $12...
Subject Tax Accounting Maurice is currently considering investing in a high dividend yield stock with no...
Subject Tax Accounting Maurice is currently considering investing in a high dividend yield stock with no growth potential that pays a 6% dividend yield or bonds issued by The Coca Cola company that pay 8%.If Maurice's ordinary tax rate is 25% and his dividend tax rate is 15%, which investment should he choose? Which investment should he choose if his ordinary tax rate is 30%. At what ordinary tax rate wouls he be indifferent to the stock or to the...
SUBJECT : Accounting and Finance Question 1 Financial accounting and management accounting have different uses to...
SUBJECT : Accounting and Finance Question 1 Financial accounting and management accounting have different uses to the stakeholders. Differentiate the broad types of accounting information between both disciplines. Question 2 The global COVID-19 pandemic have resulted in many companies contemplating to shut down or close permanently their operations. Discuss the decisions that must be considered by management before taking such a move.
(Printed work preferable. Explain step-by-step please.) 1. An educational researcher interested in the consistency of school...
(Printed work preferable. Explain step-by-step please.) 1. An educational researcher interested in the consistency of school absenteeism over time studied a sample of 8 high school students for whom complete high school records were available. The researcher counted the number of days of school each student missed while in the sixth grade and how many they missed while in the tenth grade. He obtained the following results: Student # Days Missed in 6th Grade # Days Missed in 10th A...
(Typed work preferable. Show step-by-step please.) 1. Suppose that a researcher collected the following set of...
(Typed work preferable. Show step-by-step please.) 1. Suppose that a researcher collected the following set of data on years of education (X) and number of children for a sample of married adults: X Y 12 2 14 1 17 0 10 3 8 5 9 3 12 4 14 2 18 0 16 2        a. Write out the regression equation, then calculate and interpret the meaning of the regression slope and Y-intercept. You must provide both numbers and careful...
(Please show work/step-by-step. Must be legible.) 1. The researcher from the Annenberg School of Communications is...
(Please show work/step-by-step. Must be legible.) 1. The researcher from the Annenberg School of Communications is interested in studying the factors that influence how much time people spend talking on their smartphones. She believes that gender might be one factor that influences phone conversation time. She specifically hypothesizes that women and men spend different amounts of time talking on their phones. The researcher conducts a new study and obtains data from a random sample of adults from two groups identified...
Henry Owens, CPA works in a local accounting firm. He is the tax manager on a...
Henry Owens, CPA works in a local accounting firm. He is the tax manager on a major client in the office. The firm prepares compiled financial statements for the client on a quarterly basis. The client was impacted by the BP oil spill off the Gulf coast, and the client would like to engage Henry to help the business prepare a claim for damages from BP. The client would like to pay Henry on a contingent fee basis where Henry...
Subject Name: Accounting Theory KKL consultancy Muscat provides tax and financial advisory services to their customers....
Subject Name: Accounting Theory KKL consultancy Muscat provides tax and financial advisory services to their customers. Mazin is one of their new client, who worked as an engineer. Mazin wanted to start a project and contacted KKL consultancy Muscat for advice regarding profitable investment opportunities. KKL have recommended him to invest in finance companies, stock market and insurance. KKL assured him that they will look after his matters relating to tax, and would also invest in the name of the...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT