Tax Memo F

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. no AI %

Questions:

1. Biome Startup, Inc. (BS) is dedicated to improving the world’s soil health — one farm at a time. BS implements AI technology in the science of soil management and crop production to create a virtual assistant that is able to help farmers increase crop yields and quality. BS is looking to acquire new plant facilities. BS learns that Farmer’s Co-op Corporation (Co-op) has just the plant it’s looking for. The Co-op recently closed its operation when the agri-businesses took over the market and Co-op no longer has any goodwill or going concern value. Co-op’s basis in the plant is $20,000. On January 1, BS acquired 50% of Co-op’s stock for $300,000 in cash. The fair market value of the plant on January 1 was $400,000. Co-op’s other assets at that time had a basis of $50,000 and a fair market value of $200,000. On July 1, BS acquired the remaining 50% of the Co-op stock for $300,000 in cash. The value of Co-op’s assets had not changed between January 1 and July 1. What are the tax consequences to BS, Co-op, Co-op’s shareholders if P makes no §338 election?

2. How would these tax consequences be different if BS makes a §338 election?

Tax Research Memo
Sample Format
Your Firm
Your Town and State
Date
Relevant Facts
This section should summarize the important facts of the research case. Only
include the relevant facts in a clear and concise manner.
Specific Issues
Identify the issue(s) and state the issue(s) in the form of a question.
Conclusions
Think of your conclusion as the “short” answer to your issue. The conclusion
section is the place to provide tax advice, recommend action(s) for the client to take,
or identify the need for additional information. There may not be a single “best”
alternative to the client’s issue so be sure to consider all applicable alternatives.
Support your conclusion by referencing back to the authority you discussed in the
discussion and analysis section.
Support
This section discusses the issue(s). Begin with the relevant code section(s).
Identify the code section, paraphrase what it says and then discus why it’s
important. Discussion of the relevant Treasury Regulations should follow. Identify the
regulation, paraphrase the important sections, and then address the importance of
the regulation given the facts.
The discussion
should continue by
reviewing relevant Treasury
pronouncements (Revenue Rulings, Revenue Procedures, Letter Rulings, etc.) and
cases. Be sure to include complete cite for each authority. Summarize the important
facts for the pronouncement/case and then compare the facts of the
pronouncement/case to the research facts. Discuss how the facts are similar or
different. Explain how each ruling or case supports or weakens the clients’ position.
Documentation is a very important part communicating tax research and all
statements or opinions should be substantiated with supporting cites. Supporting
cites should be to primary sources only except in rare or unusual situations.