How would you respond on behalf of your client
Course:- Accounting Basics
Reference No.:- EM13120712

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

Your client Crimson Corp. (CC) is being audited by the Department of Revenue for the State of New York for the calendar year 2010. CC had been audited by the Internal Revenue Service (IRS) for 2010 and agreed with CC's tax position that the sale of the corporation's stock as described later, was primarily treated as the sale of goodwill. The issue in question is limited to a single question. CC is a Massachusetts (MA) corporation and has made an S election several years ago. The owner of the S corporation shares is a MA resident. It has been in business since 1998. It had operated exclusively in MA from 1998 until 2004 when it began to do business in New York. It has had minimal contacts in NY, hiring a few employees in NY but the majority of the business has been solicited through its MA based sales force. In 2010, approximately 45% of its operating income was apportioned to NY with the remainder allocated to MA. In 2010, the company was sold to NPD, a publicly traded company for $100 million. The proceeds from the sale of the company were allocated entirely to MA. Its normal operating profit was allocated as previously described. NYS is now asserting that 45% of the profit from the sale of the stock must be allocated to NY. How would you respond, on behalf of your client? Are there any arguments that you could make to rebut the NY's assertions?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
In August, Gold Company sold 770 units of their only product. For the month, fixed costs were $10,400, variable costs were 57% of sales, and the average sales price was $62.
Please explain the difference between the civil suit and criminal suits brought against Ralph Cioffi and Matthew Tannin. What were the charges in each lawsuit and what were
if internal audit resources are limited to conducting only one audit at a divisional location, should a high-risk process that was audited last year at this location be audi
Effectiveness of communication - i.e.readability, legibility, grammar, spelling, neatness, completeness and presentation will be a minimum threshold requirement for all writte
Diversification in an investment portfolio is a significant concept for creating the highest return for the least amount of risk. To create this diversification portfolio ma
Moreland Corporation issued $200,000 of 10-year bonds on January 1. The bonds pay interest on January 1 and July 1 and have a stated rate of 10 percent. If the market rate o
(Departmental rates) All jobs at Frankfurt Inc., which uses a job order costing system, go through two departments (Fabrication and Assembly). Overhead is applied to jobs ba
On January 3, 2008, Roberts Company purchased 30% of the 100,000 shares of common stock of Thomas Corporation, paying $1,500,000. What was the balance in the investment accou