Create a Tax Plan

Overview
Other Taxation Topics
Individual, partnership, and corporate taxes were discussed in the previous section. There are also additional tax considerations, such as federal gifts, estate taxes, generation-skipping transfer taxes, and more. These are important rules that need to be implemented during the taxation and reporting times. In addition, CPAs also must be aware of the income taxation of estates and trusts. These entities have their own set of taxation laws that need to be followed.

Inheritance taxes are assessed when someone passes away and leaves property, money, or other tangible or intangible assets to another living individual. The most common type of inheritance takes place in the farming community where parents will leave the farm, land, and equipment to their children or other relatives. These taxes do create a great debate since some individuals are not able to afford the taxes and keep the business operating. Gift taxes occurs with property transferred during someone’s life, such as a house, car, etc. The generation-skipping transfer tax allows that the property does not skip a generation without a transfer tax being assessed. There are changes to the rules almost every year to the IRS guidelines for how the taxes are incurred and when they are paid. The value of the property and the amount paid for the property will be needed to determine the amount of the tax. Similar to the sale of property, gift and inheritance items can be considered gains or losses depending on the fair market value of the items today versus when they were purchased.

Assignment:
Tax planning should not be done in isolation, but instead should be a part of a taxpayer’s overall financial goals, and integrated with nontax considerations. Three general tax planning strategies involve (1) the timing of income and deductions, (2) the shifting of income and deductions between taxpayers, and (3) the conversion of the character of income and deductions.
For your Signature Assignment, you will prepare a tax plan for ABC Corporation. They are a new company and need assistance in preparing for taxes. Create a tax plan for the Corporation that implement the three elements listed above. Provide specific recommendations for this Corporation. Below are suggestions for what can be included in the tax plan:

Element 1: Timing of Income and Deductions:
1. Sale of assets
2. Operating loss
3. Casualty loss
4. Medical expenses
5. Itemized deductions
6. Alternative minimum tax
7. Capital gains

Element 2: The Shifting of Income and Deductions Between Taxpayers:
1. Children
2. Gift taxes
3. Owners and their businesses
4. 529 plans

Element 3: Income and Deductions Conversions
1. Sale of the company
2. Dividends
3. Passive business activities
** Support your paper with a minimum of seven (7) scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.

** Length: 6 pages, not including title and reference pages

** please include subtitles.
** check grammar and punctuation.
** follow assignment directions accordingly.

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