Reorganizations and Consolidated Tax Returns

Suppose you are a CPA, and you have a corporate client that has been operating for several years. The company is considering expansion through reorganizations. The company currently has two (2) subsidiaries acquired through Type B reorganizations. The client has asked you for tax advice on the benefit of Type A, C, or D reorganization over a Type B reorganization.


Write a four (4) page paper in which you: 1) Compare the long-term tax benefits and advantages of each type of reorganization, and recommend the type of reorganization that will be most beneficial to the client. 2) Suggest the type of reorganization the client should use for the ABC Corporation based on your research. Justify the response. 3) Propose a taxable acquisition structure for the client’s planned acquisitions over a nontaxable reorganization. Assess the value of a taxable transaction over a nontaxable reorganization for the client. 4) Examine the value and limitations of including the ABC Corporation if acquired as a wholly owned subsidiary in the consolidated return, and provide a recommendation to your client. Support the recommendation with applied research. 5) Create a scenario that will allow the client to reduce any disadvantages from filing a consolidated return as a member of a controlled group. Use the six (6) step tax research process to record your research for communications to the client.




Sample Solution