Tax Memorandum B

Tax Memorandum B

Instructions:
This is an individual assignment. The memo should not
exceed two pages and
students should use the tax memo template provided. However, the answer should be a full 2
pages (double spaced, times new roman 12pt., 1-inch margins) Do
not repeat the question in the
answer. Each memo must include an explanation of the relevant code sections, regs and/or other
relevant controlling authority such as case law. Don’t just cite the rules or cases, explain them
and their application to the specific facts in the questions. Any memo with a similarity score
exceeding 25% on Turnitin will be rejected subject to the professor’s review and sole discretion.
All tax memos are due on Saturday of each week assigned.
Questions:
Does the transaction satisfy the nonrecognition rules of Section 351? Answer each hypothetical
separately. (hint: consider whether the steps in transaction disqualify the transaction. Also, the
regulations and revenue rulings may help here!)
Hypothetical #1:
T. Swit owns all of the stock of corporation Swit X and operates a second business similar to that
of Swit X through a sole proprietorship. Pursuant to an agreement between T. Swit and Alwyn
Inc., an unrelated corporation, T. Swit transfers all of the assets of the sole proprietorship to Swit
X in exchange for additional shares of Swit X stock. T. Swit then transfers all her Swit X stock
to Alwyn Inc. solely in exchange for voting common stock of Alwyn, Inc.
Hypothetical #2:
Parent Corporation owns 80 percent of the stock of a subsidiary, S1. An unrelated corporation
owns the remaining 20 percent. Parent transfers assets to S1 solely in exchange for additional
shares of S1 stock. As part of the same plan, S1 transfers the same assets to S2, a newly formed
corporation of which S1 will be an 80 percent shareholder. An unrelated corporation will own
the remaining 20 percent of the S2 stock.

Tax Research Memo
Sample Format
Your Firm
Your Town and State
Date
Relevant Facts
Specific Issues
Conclusions
Support