Research Paper (Accounting Research paper) Example | Topics and Well Written Essays - 250 words

(Accounting ) - Research Paper Example They evaluated the Moore farm and ascertained a cost of $450,000 which is equivalent to the fair market value of an estate with geological flaw. The intention of the expertise was to organize the corporation to invest in building where each party will receive a just and equitable stock pursuant to the services or property contributed. Tim joined the joint venture after lawful consultation with his tax advisor where he opted to transfer the land for the sale instead of receiving the stock with a note of $450,000 bearing an interest after five years. Tim recognized a gain on the sale of land instead of a stock of $450,000. The gain of this interest is taxable pursuant to the internal revenue code. Concord Instruments Corporation, 67 TCM 3036, T.C. Memo. 1994-248, a related fact pattern, upheld that the oral instructions to the broker to sell the stock at a very high cost comprised of enough identification of the shares. Reg. Â § 1.107-1(c)(3) articulates that stock can only be identified fully when (1) a particular stock to be sold is identified by the taxpayer and (2) the broker in written form confirms the instructions of the taxpayer within a period deemed reasonable. The IRS’s position in concord case was that no written confirmation of the instructions of the taxpayer was provided as per regulation demands. It is, therefore, lawful that the gain amount to be recognized should follow the FIFO basis in determination of the cost incurred to the shares sold. The taxpayer had an obligation to admit the argument of the taxpayer. It was concluded that the regulations in action currently do not make the provision of exclusive ways of identifying the stock that is sold. The taxpayer was allowed by the court to use the specific identification method. In a similar case, The Internal Revenue Code Reg. section 1.1031(a)-I(c), the ruling involved the property of the same kind but