Steps in Incorporation 1 prepare articles of incorporation 2 signing the articles by one + of the incorporators 3 filing the articles with the Secretary of State while paying the fees 4 Receive receipt from SoS 5 Holding a meeting to adopt bylaws, elect officers…   Articles of Incorporation Must have name which must include [...]

Limited Liability Companies Combines nontax advantages of the corporation and the favorable tax status of partnerships Wyoming in 1977 passed first LLC statute Uniform Limited Liability Company Act of 1996 -          Provides default rules to govern in absence of contract -          Ullca is similar to rupa   Tax treatment of LLC’s May elect to be [...]

Operations of Partnerships   Two important relationships during the operation of a partnership or Limited liability partnership Relation of the partners to each other and the partnership Relation to relying 3rd parties Duties to each other Rupa- highest degree of loyalty Good faith and fair dealing Share this post!

Forms of Businesses and Partner Formation Types of Business Sole proprietorship -          One owner -          Can go after personal assets -          Easy to form and cheap -          Default system -          Cannot be sued as a business, just person   Partnership -          2 or more owners -          Profits are equally shared -          Personally liable -          1040 [...]

Law of Agency  What is an Agent and Principle Agency is a 2 party relationship in which the agent is authorized to act on behalf of the principal   Agency Law’s most important social function is to stimulate commercial activity   -          Rules governing the formation of the agency -          The duties the principle and [...]

Section 351 transferors covered Non-recognition section Allows transferors to not recognize gain or loss realized         Section 357   Transferee assumes liabilities of transferor Example: mortgage   None of the liabilities will be treated as “boot” If transferee assumes transfer of transferor, it does not become boot At time of transfer FMV [...]

Title 26 in USC -internal revenue code   IRS enforces the code, does not make it -Congress makes the code IRS under executive branch   3 types of treasury regulations that interpret IRC Interpretative -Treasury dpt’s interpretation of what the tax law says -not enforceable and is not law Procedural -how you have to do [...]

Intro to tax practice   Tax avoidance ———————————————————–tax evasion   Tax avoidance- paying minimum amount of tax legally owed by arranging transactions in a certain way   Tax evasion- intentional underpayment of a tax that is owed -          Criminal and subject to fines/jail -          Punished by regulatory bodies Board of accountancy Courts -          Evidence can [...]

Property, plant and equipment Plant assets, fixed assets, Durable   User in operations, Long-term in nature and depreciated Physical substance   Includes: Land, buildings, equipment   Cost of Land -purchase price -closing costs such as title and fees – costs of grading, filling, clearing, removing old buildings -Liens or encumbrances – Additional improvements that have [...]

Prizes are taxable income Scholarships may be excluded Gifts are not taxable Inheritance is not taxable Insurance proceeds are not taxable   Legal settlements are taxable -unless due to injury or illness   Divorce No gain or loss on transfer of property Alimony is taxable and deductible Child support is not taxable   Government transfer [...]