Module 8 Introduction

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Do curso por University of Illinois at Urbana-Champaign

Taxation of Business Entities I: Corporations

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University of Illinois at Urbana-Champaign

Taxation of Business Entities I: Corporations

13 ratings

Curso 3 de 5 em Specialization U.S. Federal Taxation

This course provides an introduction to the U.S. federal income taxation of corporations and their shareholders. The course focuses on the relevant provisions of Subchapter C of the Internal Revenue Code, as well as related Treasury Regulations and judicial opinions, governing corporate formation, operations, distributions, and liquidation. Practical in-class study problems facilitate self-discovery of technical tax knowledge along with the development of a variety of professional skills and attitudes.

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Module 8: Corporate Reorganizations

In this module, you will explore corporate reorganizations. First, some background on the history of corporate restructuring will be given. Next, you will be introduced to the different types of tax-deferred reorganizations. Finally, you will learn analyze the tax consequences of these reorganizations.

Module 8 Introduction2:53

Conheça os instrutores

Michael P Donohoe, PhD, CPA
Associate Professor of Accountancy and PwC Faculty Fellow
Department of Accountancy, Gies College of Business

[MUSIC]

The previous module examined corporate liquidations, which involved lining up

the affairs of a particular C corporation at the end of its life cycle.

Similarly, this module examines corporate restructurings,

also known as reorganizations, which may end the life of a C corporation.

It is important to point out that the term reorganization is

often associated with financial difficulty.

Such as the reorganization of debts under state or federal bankruptcy laws.

For taxes purposes, however, the term is one of art,

as it refers to any corporate restructuring or rearrangement.

Which can, but does not necessarily occur at the end of the corporate life cycle.

A fundamental objective of the US tax system is to encourage business growth,

which in turn can result in tax revenue for the federal government.

This is primarily why section 351 allows corporate entities to form without

current tax consequences.

Similarly, Congress also allows corporations to reorganize their business

dealings without current tax consequences, as long as certain conditions are met.

As such, tax differed status may apply to several different types of corporate

reorganizations.

Including acquisitions, combinations, consolidations, divisions, and

changes in the jurisdiction of incorporation or even company name.

The corporate form holds a considerable amount of assets in the US economy, for

example, according to the IRS Statistics of Income, total assets reported for

active corporations was in excess of $88 trillion for the 2013 tax year.

Thus, the dollar value of corporate reorganizations, and

any result in tax consequences, can be substantial.

For this reason, tax law often dictates the type or

form of reorganization carried out by a corporation.

In this module,

you will learn about different types of tax deferred reorganizations.

Specifically, in the first lesson, you will review the so-called confusing legacy

of IRS rulings and court decisions that shape the tax rules of today.

The next lesson examines sections 368, which defines seven types of corporate

reorganizations that received non-recognition treatment, and

five principles that underlie these definitions.

From here you will learn more about the tax treatment of a reorganization,

which is similar to the treatment of like kind exchanges.

Along the way, you will examine real world reorganizations

undertaken by well known corporations.

As always, when relevant, you will apply these concepts to Sunchaser Shakery.

Note that this area of taxation is extremely dense and complex, thus

the overarching goal of this module is to familiarize you with the basic principles.

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