Gonzalez, a U.S. citizen, owns 1% ofUSAco, a domestic corporation. All other shareholders ofUSAcoare unrelated foreign persons. In a Type B reorganization,FORcotransfers shares of its voting stock...

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Gonzalez, a U.S. citizen, owns 1% ofUSAco, a domestic corporation. All other shareholders ofUSAcoare unrelated foreign persons. In a Type B reorganization,FORcotransfers shares of its voting stock toUSAcoshareholders in exchange for 100% of the stock inUSAco. Gonzalez realizes a gain on the exchange. As a renowned and reputable international tax planning consultants, Gonzalez retains your services so that he can minimize any potential tax liabilities.
Relying on the concepts learned from the assigned materials for this module,in a brief advising Gonzalez,you are required to:

  • Discuss and make recommendations to him onhow he can avoid the outbound-toll charge on the gain?.

  • Discuss other students’ postings in accordance with the instructions/expectations for Discussion Board postings as provided above.


Note:

  • Feel free to contact other relevant materials that you may deem fit. You must cite and provide references for all materials used as appropriate. Please refer to ‘Discussion Board Postings Rubric’ in answering this Module'sassessments.



Answered Same DayJul 08, 2022

Answer To: Gonzalez, a U.S. citizen, owns 1% ofUSAco, a domestic corporation. All other shareholders ofUSAcoare...

Rochak answered on Jul 09 2022
83 Votes
Gonzalez can ‘Transfer the stocks to a foreign partnership’. This option will help in avoiding Section 367 (Cloyd, Mills and Weaver 2003). As under section 1001(a) of the Internal Revenue Code, any partner who contributes to the new partnership which is formed in exchange for any voting rights or interest in the venture can realize a gain or loss which will be equal to the difference between the market value of the partnership established and the...
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