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PLEASE READ ALL THE INSTRUCTIONS AND ANSWER CORRECTLY
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Tax Memo C
Instructions: This is an individual assignment. The memo should not exceed two pages and
students should use the tax memo template provided. However, the answer should be a full 2
pages (double spaced, times new roman 12pt., 1-inch margins) Do not repeat the question in the
answer. Each memo must include an explanation of the relevant code sections, regs and/or other
relevant controlling authority such as case law. Don’t just cite the rules or cases, explain them
and their application to the specific facts in the questions. Any memo with a similarity score
exceeding 25% on Turnitin will be rejected subject to the professor’s review and sole discretion.
All tax memos are due on Saturday of each week assigned.
Questions:
1. Part 1: On January 1, 2020, Mark Z., an individual owned all of the stock of Mita
Corporation with an adjusted basis of $2,000. During 2020 Mark Z. received distributions
from Mita Corporation totaling $30,000, consisting of $10,000 in cash and listed
securities having a basis in in Mita Corporation and a fair market value on the date
distributed of $20,000. Mita Corporation’s taxable year is the calendar year. As of
December 31, 2020, Mita Corporation had earnings and profits accumulated after
February 28, 1913, in the amount of $26,000, and it had no earnings and profits and no
deficit for 2020. What result to the shareholder under Section 301?
2. Part 2: The facts are the same as in Example 1 with the exceptions that the shareholder of
Mita Corporation is Banana Corporation and that the securities which were distributed
had an adjusted basis to Mita Corporation M of $15,000. The distribution received by
Banana Corporation totals $25,000 consisting of $10,000 in cash and securities with an
adjusted basis of $15,000. What result to the shareholder under Section 301?
3. An individual, H, his wife, W, his son, S, and his grandson (S’s son), G, own the 100
outstanding shares of stock of a corporation, each owning 25 shares. Apply the stock
attribution rules and determine each individual’s interest in the corporation.
Tax Research Memo
Sample Format
Your Firm
Your Town and State
Date
Relevant Facts
Specific Issues
Conclusions
Support
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