Organizational Tax Research and Planning - Transfers to a Corporation Paper

Organizational Tax and Planning - Transfers to a Corporation - Research Paper Example For an individual or group to have entire control of the business after the exchange, they must own a minimum of 80% of all shares of every class of shares that is allowed to vote. The transferor must also own 80 percent of the existing shares of every category of company’s nonvoting stock. The number of shares determines the voting power, and this implies that the transferor or group of transferors must have the majority control. Having less than 80 percent control thus triggers taxation. Client, jean and john purchase property for $ 1million. They both arrange for a corporation with $20 million fair market value. Client and jean reassign the assets to the company for its entire authorized stock that has a book value of $20m. No transaction party; that is Client, jean, john or the corporation recognizes gain. Client, jean and john transfer property worth $8M to a company in substitution for stock whose fair market value is $24M. This represents a 60% of every stock class in the corporation. Supposing the other 40% of the company’s stock was sold off to someone else, then the taxable gain that Client, jean and john recognize is $16M from the exchange as they do not have the majority control. With regards to substitution of assets for stock, service is not considered as property. Therefore, the value of stock to be received as a result of rendering a service will be considered as income to the stock recipient. Therefore, rendering service in exchange for stock will trigger a taxable event as illustrated below. Client, jean and john transfer property worth $0.9M and offer services worth $0.1M to a company in exchange for stock worth $1M. Supposing that Client, jean and john have the majority ownership in that corporation, no gain on earnings will be included in the property exchange. Nevertheless, the Client, jean and john recognize 0.1M income from the services they provided to the company and this will be taxable income. Property

Challenges of Advance Planning in Care-Giving Assignment

Challenges of Advance Planning in Care-Giving - Assignment Example This assignment explores one of the most basic challenges in advanced planning as the misconception that it requires a complex legal documentation process. These make patients reluctant in engaging in the process. In such a situation, a patient may require some time to go and rethink the issue over and prepare for a discussion over the matter. It is necessary at this point to demonstrate the benefits of the plan to their lives and to family members (Laverty, Laverty, & Cindy, 2010). Initiating this program only requires patients to be thoughtful and engage the family in their discussions. Lack of awareness, State laws support advance directives in care giving for all individuals. Nevertheless, there is still no clear process and procedures to allow individual wishes to be known and be fulfilled at the appropriate time. Support studies sponsored by various organizations such as Robert Johnson Foundation in America reported that almost 75% of terminally ill patients do not like cardiop ulmonary resuscitation but less than 50% of their care givers know about this. Even if the patient had documented his preference, less than 42% of the cases are discussed by the actual care giver (Bumagin & Hirn, 2006). These bring lack of awareness as a strong challenge to the process of advanced planning. Denial is also a key problem in advance care planning. The society’s denial of death and dying puts patients in a situation where they cannot make decisions for themselves. These make them unable to heed waning of life just as we acknowledge the waning of birth. Denial about death makes people not to review life. Live in fear and uncertainty when these happens, the patient is unable to make clear directives of his health care preference. Confusion this is also a big challenge that affects advance plans in health care giving. Despite a strong desire for quality life and â€Å"good death†, many people worry about conflicting feelings within them. These conflicts arise from palliative care and doing whatever it takes to extent patient’s life. Research carried out by Regence Foundation shows that almost 50% of the respondent ascertained that emphasizing on palliative and end of life care options can interfere with the processes put in place to extent the patient’s life as long as possible (Bumagin & Hirn, 2006). This creates a misunderstanding of what to take as the best alternative. Majority of patients, who benefit from Medicare of all racial and ethnic groups, argue that in the event of a terminal illness with less than months to live, they would rather stay at home and die. They would not like to use life-prolonging drugs that have uncomfortable side effects to prolong their lives for a week or month hindering advance planning. However, various researchers like Amber Barnato, MD and colleges have discovered different distribution of end life preferences in different races ethnic groups. For example a research done between the whi tes and the blacks shows that more blacks are likely to die in the hospital compared to white.