Analyze various forms of property for potential estate

Assignment Help Taxation
Reference no: EM131235368

Overview

The second final project for this course is the creation of a PowerPoint presentation.

Everyday economic events can have significant estate and gift tax consequences. Being able to spot estate and gift tax issues and communicate effectively with clients is essential for any high-level financial professional working in a privately held enterprise or advising high-net-worth individuals. Professional accountant working in a bank, consulting firm, or financial services firm are often responsible for advising clients on tax implications of their financial investment decisions, including estate and gift taxation as it is currently applied in the United States and around the world.

In this project, you will model the role of an associate in a boutique tax consulting firm that specializes in the real estate industry. You will demonstrate your ability to advise clients on estate and gift taxation, life insurance, annuity, and charitable giving strategies, and make ethically sound and socially responsible decisions by creating a PowerPoint presentation for your client.

In this assignment you will demonstrate your mastery of the following course outcomes:

- Assess the potential gift or estate tax liability in relation to the annual exclusion, gift tax deductions, marital deduction, and unified credit, as provided for by the Internal Revenue Code, while meeting the client's desired economic outcomes

- Analyze various forms of property for potential estate and gift tax consequences of these forms of ownership, as provided for by the Internal Revenue Code, Treasury Regulations, and case law, and their impact on the client's economic outcomes

- Evaluate the risk of noncompliance with AICPA, IRS Circular 230, and the penalty provisions of the Internal Revenue Code in light of possible stakeholder misconduct, using moral reasoning to advise the client

- Recommend strategies that reflect versatility of thought, for achieving favorable estate and gift tax consequences of wealth transfers, by reducing tax liability in order to meet the client's desired economic outcomes

- Evaluate the influence of an estate and gift tax planning strategy on the effectiveness of the overall tax strategy, including income tax, and its potential to result in ethically sound outcomes and optimum desired results for the client

Prompt

You are an associate in a boutique tax consulting firm that specializes in the real estate industry. You have been assigned to work with a client who needs advice on the tax implications of his business holdings, which include Skyscrapers, a commercial real estate firm organized as a sole proprietorship with a fair market value of $1 billion. He is considering transferring partial ownership of the Skyscrapers to both of his children and selling a 10% interest to an unrelated third party. You have already prepared a memorandum informing management of the estate and gift tax consequences of these potential transactions and including a cost- benefit analysis. Now, you need to prepare a PowerPoint presentation that communicates your tax planning strategy, which you will present to the client and his financial advisors.

Specifically, the following critical elements must be addressed:

I. Introduction

A. Describe the estate and gift tax strategy to the client in layman's terms. Concentrate on the creative aspects of the strategy that minimize the client's tax liability over time.

B. Explain how family limited partnerships (FLPs) and intentionally defective grantor trusts (IDGTs) help to accomplish the client's desired economic results. Consider the jargon and mechanics of the transaction when preparing the presentation.

C. Justify how your strategy will minimize income tax liability on the sale of the partial interest in the business to an unrelated third party and on the taxable income potentially received by the business's operations over the next 24 months. Consider including comparisons to alternative transaction structures in the justification.

II. Tax Planning Strategy

A. Recommend life insurance, annuities, and charitable giving strategies to the client, taking into account anticipated business needs and cash flow.

B. Summarize, using layman's terms, how the taxpayer's overall cash flow and liquidity concerns were taken into account when designing the proposed strategy. Consider current gift tax expenditures.

C. Explain the 30-year projections in layman's terms, assuming 3% annual appreciation in the value of the assets of the business, using the proposed estate tax strategy. Consider the gift and estate tax liability the client will ultimately pay.

D. Formulate the potential lifetime estate tax savings and tax liabilities over 30 years under the proposed strategy and without the proposed strategy. Consider IRS Code and Regulations.

E. Analyze long-term income tax considerations by comparing the total income tax liability with no tax strategy against the liability applying your proposed estate tax planning strategy.

III. Risk Analysis: Analyze penalties, interest, and ethical considerations that might impact the client using the following scenarios. Keep layman's terms in mind as you word the results of your analysis supported by appropriate IRS Code and Regulations.

A. The client did not have enough cash on hand to fund gift tax or income tax incurred from the estate planning.

B. The client encouraged his friend to prepare an inaccurate appraisal.

Reference no: EM131235368

What is the difference between a sales tax and a use tax

What is the difference between a sales tax and a use tax? What is an ad valorem tax? Name an example of this type of tax. What are the differences between an explicit and

Capital gains tax

Capital Gains Tax - In July 2011 the Labour Party put forward a proposal to have a comprehensive Capital Gains Tax (CGT) for New Zealand.

What is the definition of a marginal tax rate

Quiz on "How Can Scandinavians Tax So Much?" by Kleven (2014), What is the definition of "means test"? What is the definition of a marginal tax rate? What is the definition of

What tax basis does samson take in the devon net assets

What tax basis does Samson take in the Devon net assets and how does Devon use Section 337 to create a nonrecognition gain transaction when Devon transfers appreciated assets

Determine the income tax savings in the current year

Determine the income tax savings in the current year for the business and for them personally if they form the business as a partnership, S corporation, or C corporation.

What issues associated with the representation and deal

Please list the possible issues/concerns/problems that may be associated with the representation and deal. Focus on agency, ethics/fair housing, listing/buyer representation

The payments be prepaid income subject to tax

The IRS agent insists that the payments be prepaid income subject to tax in the year of receipt. Your client believes that the amounts involved are customer deposits. Writ

Identify at least two methods of conducting business in us

Based on your research, identify at least two methods of conducting business in the U.S. for your client, and compare the tax advantages and disadvantages of each that would

Reviews

len1235368

10/8/2016 3:33:38 AM

In this project, you will model the role of an associate in a boutique tax consulting firm that specializes in the real estate industry. You will demonstrate your ability to advise clients on estate and gift taxation, life insurance, annuity, and charitable giving strategies, and make ethically sound and socially responsible decisions by creating a PowerPoint presentation for your client.

len1235368

10/8/2016 3:33:17 AM

Strategy: Explain Meets “Proficient” criteria and includes the 30-year projected gift and state tax liability the client will pay Strategy: Formulate Meets “Proficient” criteria and details are comprehensive and accurately cite IRS Code and Regulations Strategy: Analyze Meets “Proficient” criteria and details justify how the proposed strategy addresses income tax in comparison to no estate and gift strategy being pursued Risk Analysis Meets “Proficient” criteria and details accurately and clearly communicate results that are supported by appropriate IRS Code and Regulations Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format

len1235368

10/8/2016 3:31:56 AM

Introduction: Describe Meets “Proficient” criteria and details creatively minimize the client’s tax liability over time Introduction: Explain Meets “Proficient” criteria and details provide exceptional ability to clarify the jargon and mechanics of the transaction Introduction: Justify Meets “Proficient” criteria and illustrates the effectiveness of the proposed income tax strategy in comparison to alternative transaction structures Strategy: Recommend Meets “Proficient” criteria and strategies show creative approaches that address the client’s anticipated financial needs Strategy: Summarize Meets “Proficient” criteria and details accurately and comprehensively show how the proposed strategy maximizes future estate tax strategy while being efficient with current gift tax expenditures

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd