Case Summary The tax court case being analyzed is between three appellants - Groupe Honco Inc., 9069-4654 Quebec Inc., and Gestion Paul Lacasse Inc. - and the respondent who is Her Majesty The Queen. This case was judged by The Honourable Justice Patrick Boyle. The purpose of this case was to determine if New Supervac’s principle reason for acquiring Old Supervac was to receive their capital dividend account (CDA) so that they could pay out dividends from the CDA tax free. The case also wanted to determine whether the capital dividends received by the appellants are deemed not to be capital dividends and instead should be treated as taxable dividends.
The case came about when Paul Lacasse (principle and controlling shareholder of appellant
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Section 83(2.1) states that when the primary reason for acquiring another business is to acquire their capital dividend account, any dividends paid out of that account become taxable dividends. Paragraph 87(2)(z.1) says that when computing the capital dividend account of a new corporation, it will be deemed to be the same corporation as all predecessor corporations. These sections are important to this tax case because it helps determine whether the appellants should be allowed to receive a tax free capital dividend or if they will be deemed to be taxable …show more content…
Then the corporations were amalgamated and the paid-up capital (PUC) of their respective shares was combined to form the PUC of the amalgamated corporation. If the corporations had stayed as parent and subsidiary, the PUC of the subsidiary would have been eliminated on amalgamation. Subsequently, the amalgamated corporation redeemed a large portion of its shares and paid out the combined PUC related to those shares to the non-resident shareholder. This payment was treated as a return of capital to the non-resident shareholder instead of taxable
We started our research by reading through the discussions posted within the Topic of Research. From there we read the recommended pages of the text, 20-2, 20-3, and 20-4 regarding the liquidation process. Using the CCH Tax Research Network, we used a selected content search, Federal Tax--Federal Tax Editorial Content--Standard Federal Tax Reporter (2014), to research the following laws: Section 331(a), 336(a), and 6901(a). We also used the Citator in CCH to review the facts and decisions shown in the liquidation cases of Kennemer and Al Zuni of Arizona.
The value of Poor Son declined significantly since external economic conditions. It shows that the fair value of Poor Son, the emerging entity, should be way less than its book value, and the value of assets is less than the total of liabilities and claims. Additionally, Parent will receive 100% voting shares of Poor Son and have the ability to name all members of Poor Son’s board of directors. This means that existing voting shares receive less than 50% of the voting shares of the emerging entity. For that reasons, Poor Son should apply “Fresh-Start” under ASC 852-10-45-19.
Blaise M. Sonnier, J.D., DBA. (2012). Circular 230: Its Day-to-Day Impact on Tax Practices. Retrieved October 12, 2016, from http://www.thetaxadviser.com/issues/2012/feb/tpr-feb12.html
Murray reported his employer to the Environmental Protection Agency claiming his employer had been illegally dumping chemicals into a river. Murray’s employer fired him and intentionally attempted to prevent Murray from attaining another job. Murray retaliated by suing his former employer. Murray claimed that his reputation was damaged and he won the lawsuit. Murray received an award for “damages to his personal and professional reputation and for his mental suffering.” Murray makes an argument stating this award is a recovery of his human capital, and a recovery of capital is not income. Will this amount be taxable?
Nearly every aspect of law enforcement has a court decision that governs criteria. Most court rulings are the result of civil lawsuit towards a police officer and agency. However, currently, there is no law that mandates law enforcement driver training. When it comes to firearms, negligence by officers has resulted in a multitude of court rulings. Popow v. City of Margate, 1979, is a particularly interesting case that outlines failed firearms training by an agency. In this case, an officer chasing a suspect during a foot pursuit fired at the suspect, striking and killing an innocent bystander (Justia.com, 2017). The court ruled that the agency was “grossly negligent” of “failure to train” (Justia.com, 2017). As a result, nearly every agency requires annual firearms training and has written policy concerning the same. Officers must show proficiency in firearms use every year to maintain their certification. Many states even impose fines on officers for
“any and all Losses, debts or rights, whether fixed or contingent, known or unknown, matured or unmatured, arising out of, relating to, or in any manner connected with any facts, events or circumstances, or any actions taken, at or prior to the consummation of the transactions contemplated by the Merger Agreement that any Releasor ever had or now has against the Releasees, including any right, title and interest in and to the Shares.”
Facts: Two residents of Virginia, Mildred Jeter a colored woman and Richard Loving a white man, got married in the District of Columbia. The Loving's returned to Virginia and established their marriage. The Caroline court issued an indictment charging the Loving's with violating Virginia's ban on interracial marriages. The state decides, who can and cannot get married. The Loving's were convicted of violating 20-55 of Virginia's code.
It is proper to present a business definition of merger as it found on legal reference with the ultimate goal in the pursuing of an explanation on which this paper intents to present. A merger in accordance with the textbook is legally defined as a contractual and statuary process in which the (surviving corporation) acquires all the assets and liabilities of another corporation (the merged corporation). The definition go even farther to involve and clarify about what happen to shares by explaining the following; “the shareholders of the merged corporation either are paid for their share or receive the shares of the surviving corporation”. But in simple terms is my attempt to define as the product or birth of a corporation on which typically extends its operation by combining with another corporation. So from two on existence corporations in the process it gets absorbed into becomes one entity. The legal definition also implied more than meet the eye. The terms contractual and statuary, it implied a process on which contracts and statuary measures emerge as measures to regulate, standardized, governing or simply at times may complicate whole process. These terms provide an explicit umbrella and it becomes as part of the agreement formulating or promoting a case for contracts to be precedent, enforced or regulated in a now or in the future under a court of law under the Contract Business Law Statue of Practice. As for what happens to the shares of the involved corporations no more explanation is needed as the already actions mentioned clearly stated of the expectations of a merge’s share involvement.
In SIVMED’s case, based on the definition of WACC, all capital bases should be included in its WACC. These include its common stock, preferred stock, bonds and long-term borrowings. In addition to being able to compute for the costs of capital, the WACC also determines how much interest SIVMED has to pay for all its activities. The value of the firm’s stock, which we want to maximize, depends of the after-tax cash flow. Hence, after-tax values for WACC are also needed. Furthermore, cost of capital is used to determine the cost of each debt, stock or common equity. Being able to analyze these will be essential into deciding what and how new capital should be acquired. Hence, the present marginal costs are ideally more essential than historical costs.
Tax Law and Accounting In today's society, income taxes are something that almost everyone is familiar with. However, the tax law and general purpose of income taxes is something in which the general society gives little thought. In addition, few tax preparers are aware that differences exist between the Generally Accepted Accounting Principles (GAAP) and tax accounting, not to mention the ramifications of avoiding or evading to properly complete the reporting of income taxes. This paper will discuss the objectives of modern tax law, the differences between Generally Accepted Accounting Principles (GAAP) and tax accounting, as well as the differences between tax evasion and tax avoidance.
The defendant is an Airlines Company that had 900 employees. The economic crisis followed with monetary crisis gave bad effects to the defendant. They should decrease the number of their airplanes form 9 to 2 airplanes. They also had to do the efficiency on their employees to 700. On the efficiency process, there was an agreement between the defendant and employees representation on October 30 1998. The agreement stated that they would bring Independent Public Accountant to analyze company financial condition. During the process, all side should work on their duty. The Defendant should pay employees’ wage. The agreement was not guarantee that didn’t mean the dispute process was over, but the negotiation still moved on. During the process, there was another agreement between the defendant and several employees. They agreed the finish the disputed process and the employees would get separation pay. Meanwhile, other employees, who were 153 people didn’t agree with that agreement. Because they didn’t agree each other, so the employees gave the case to the “Panitia Penyelesaian Perselisihan Perburuhan Pusat (P4P)”.
Furthermore, the new entity had a solid capital structure with 40% equity and also 43.3% subordinated debt
Taxation has evolved throughout history as a method of funding government functions. The US government began taxing its people by imposing tariffs on certain items such as liquor, tobacco, sugar, and legal documents. Currently, there are taxes on almost every function. The IRS regulates income tax laws, central appraisal districts control property tax values, and there is a state sales tax on most purchases across the country. Taxes are difficult, if not impossible, to avoid. Benjamin Franklin stated “'in this world nothing can be said to be certain, except death and taxes” (Isaacson 463). Revenues from property taxes are used to fund public schools, hospitals, and local governments. I will discuss the history of property taxes and compare the Texas property tax rate to the rest of the country. Property taxes are more efficient than income tax and a better way for local governments to collect revenue from taxpayers.
...tion of Incomes of Corporations Among Dividens, Retained Earnings, and Taxes. The American Journal Review, 46(2), pp. 97-113.
Pucek, CPA, and Glenn E. Richards, CPA, “in circumstances outside of troubled debt restructuring, the relevant accounting guidance (FASB ASC Section 470-50-40, Debt Modifications and Extinguishments) states that “extinguishment transactions between related entities may be in essence capital transactions.” If the extinguishment of debt is realized to be a capital transaction then it cannot recognize a gain or a loss. It is difficult to clearly differentiate between a capital transaction and recognition because there are little measures for this