Reference no: EM13576109

Many factors beyond profits and sales can ultimately impact a corporation's tax liability. Factors such as corporate form, accounting methodology, reporting requirements, and reorganizations can drastically influence the amount of tax a corporation owes. This course project will require you to consider multiple dynamics common to many corporations that ultimately determine tax liabilities. You are an employee of ABC Accounting Firm, working in the Tax Department. On Monday, you are assigned to work with Ms. Griggs, who is a new client for the company. Tasks: Ms. Griggs has decided to open Knoxville Musical Sales and needs to determine which organizational structure will be the best for her company. Write a memo to Ms. Griggs, outlining the advantages and disadvantages of sole proprietorships, partnerships, corporations, S-corporations, limited liability companies, and limited liability partnerships. After careful consideration of your memo, Ms. Griggs has decided incorporating the business and needs to know the legal requirements for forming her corporation. Write a memo to Ms. Griggs, outlining the requirements for forming a corporation. The memo should include tax considerations and the requirements under Section 351 because in exchange for stock with the corporation, she will be transferring property into the corporation to establish the assets for the corporation. Knoxville Musical Sales will follow a calendar year for tax purposes and will use the accrual method of accounting.

Prepare the 2011 corporate tax return for Knoxville Musical Sales, Inc., along with any necessary supporting schedules.