WEST CH 4 SOLUTIONS (2007)
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WEST CH 4 SOLUTIONS (2007)

Course Number: ACC 355, Spring 2007

College/University: Delaware County CC

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Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:25 User ID: 40520 CHAPTER 4 CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE SOLUTIONS TO PROBLEM MATERIALS Question/ Problem 1 2 3 *4 5 6 *7 8 9 10 11 12 13 14 15 16 17 18 Topic Compare 351 and 1031 in terms of justification and effect Possible gain and/or loss recognition on a 351 transfer Stock issued for...

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K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Path: Date: 11th April 2006 Time: 11:25 User ID: 40520 CHAPTER 4 CORPORATIONS: ORGANIZATION AND CAPITAL STRUCTURE SOLUTIONS TO PROBLEM MATERIALS Question/ Problem 1 2 3 *4 5 6 *7 8 9 10 11 12 13 14 15 16 17 18 Topic Compare 351 and 1031 in terms of justification and effect Possible gain and/or loss recognition on a 351 transfer Stock issued for services Taxation of boot received Receipt of nonqualified preferred stock in exchange for property transferred to a controlled corporation Explain control requirement of 351; effect of specific situations on control requirement Incorporating an existing business Types of consideration received in exchange for property; alternatives other than stock Charitable gift of stock shortly after 351 exchange Shareholder who transfers property and services for stock as part of control group Transfers to an existing corporation Effect of debt on basis in corporate stock in a 351 transfer Bona fide business purpose requirement in transfer of liabilities to a controlled corporation Rationale for 357(c) Impact of various attributes on stock basis calculation When stock issued for services is deductible/ not deductible Holding period rules for corporation and shareholder contrasted Basis rules for property acquired from a shareholder and from a nonshareholder 4-1 Status: Present Edition Unchanged Unchanged New Unchanged New Unchanged Unchanged Unchanged New Unchanged Unchanged Unchanged Unchanged Unchanged New Unchanged Unchanged Unchanged Q/P in Prior Edition 1** 2** 5** 6** 7** 8** 10** 11** 12** 13** 14** 16** 17** 18** Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:25 User ID: 40520 4-2 2007 Corporations Volume/Solutions Manual Status: Present Edition Unchanged New New Unchanged Unchanged Unchanged Unchanged New Unchanged Unchanged Modified Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged New Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged Unchanged New Unchanged Unchanged 39** 40** 41** 42** 43** 44** 45** 46** 47** 48** 50** 22** 23** 24** 25** Q/P in Prior Edition 19** Question/ Problem 19 *20 21 22 23 24 25 *26 *27 28 29 30 31 32 *33 34 35 36 *37 38 *39 *40 41 42 43 *44 45 46 47 48 49 50 Topic Advantages of utilizing debt in the capitalization of a corporation Relevant factors in reclassification of debt as equity Tax treatment of worthless stock Shareholder loan to corporation: business or nonbusiness bad debt? Tax treatment in selected situations where corporate stock has declined in value Selection of assets to transfer to corporation Selection of assets to transfer to corporation Formation of corporation; gain or loss on transfer; transfers of property, basis computations Formation of corporation; gain on transfer; basis of stock; basis of property Formation of corporation with transfer of property from several shareholders at different times Transfer of property to a corporation after date of formation of corporation Transfers to existing corporation Transfer of property and services for stock Subsequent transfers to corporation Formation of corporation; transfer of services for stock Formation of corporation; transfer of services for stock Stock received for services rendered Transfers to existing corporation; transfer of nominal amount of property Property subject to liability in excess of basis transferred to corporation for stock Shareholder liabilities assumed by corporation in excess of basis of assets transferred Application of 357(b) and 357(c) Incorporation of cash basis business; effect of trade payables Stock received for services rendered Stock received for services rendered Depreciation recapture in a 351 transfer Contribution to corporation by nonshareholder Investor losses; business versus nonbusiness bad debts Reclassification of debt as equity Section 1244 stock Transfer of 1244 stock to another individual Transfer of 1244 stock to another individual Reclassification of debt as equity; debt-equity ratio 27** 28** 29** 30** 31** 32** 33** 34** 35** 36** 37** Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:25 User ID: 40520 Corporations: Organization and Capital Structure Status: Present Edition Unchanged Unchanged New Unchanged New Unchanged Unchanged 4-3 Q/P in Prior Edition 1** 2** 4** 6** 7** Research Problem 1 2 3 4 5 6 7 Topic Liabilities in excess of basis on corporate formation Transfer of property to investment company; gain recognition Avoiding the 351 rules Shareholder/employee transfers to corporation: alternative treatments Internet activity Internet activity Internet activity *The solution to this problem is available on a transparency master. **Refers to the Solution Manual materials for Chapter 3 in the 2006 Edition. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:25 User ID: 40520 4-4 2007 Corporations Volume/Solutions Manual CHECK FIGURES 26.a. 26.b. 26.c. 26.d. 26.e. 26.f. 26.g. 26.h. 26.i. 26.j. 26.k. 27.a. 27.b. 27.c. 27.d. 27.e. 27.f. 27.g. 27.h. 28.a. 28.b. 28.c. 29. 31.a. 31.b. 31.c. 32. 33.a. 33.b. $6,000. $30,000. $36,000. $9,000. $45,000. $54,000. $0. $15,000. $15,000. $0. $30,000. $0. $190,000. $140,000. $0. $285,000. $125,000 equipment; $10,000 patent. No change. No change. None recognizes gain or loss. $180,000 loss. Clyde's transfer should not be integrated with the others. $650,000 recognized gain. Yes. Dan recognizes no gain, basis in Crane stock $60,000; Vera recognizes gain $50,000, basis $80,000 in Crane stock. $60,000 in land; $30,000 in machinery. $250,000 recognized gain. Ann $0; Bob $15,000. Ann $150,000; Bob $45,000. 33.c. 34. 35. 36.a. 36.b. 37. 38. 39.a. 39.b. 40. 41.a. 41.b. 42.a. 42.b. 43. 44.a. 44.b. 44.c. 47. 48. 49. $150,000 basis in property Ann transferred; $30,000 basis in property Bob transferred; $15,000 basis in organization costs. Both Ann and Bob recognize gain. Kim ordinary income of $10,000; Azure 162 deduction of $10,000. Rhonda recognizes $185,000 gain. Rhonda still recognizes $185,000 gain. Paul zero basis; Swift basis $60,000. No gain recognized; $40,000 stock basis; $400,000 basis of property to Green. $475,000 recognized gain. $250,000 recognized gain. No gain recognized. Sara no gain; Jane income $15,000. $25,000 in property from Sara; $10,000 in property from Jane; deduction of $15,000 for services. $15,000. $10,000; capitalize. Carol recognizes no gain; Lark ordinary income $75,000; basis $20,000 in machinery. $0. $0. $0 basis for building; $100,000 basis for inventory. Ordinary loss $50,000; long-term capital loss $40,000. Long-term capital loss $40,000. Long-term capital loss $20,000. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:25 User ID: 40520 Corporations: Organization and Capital Structure DISCUSSION QUESTIONS 1. 4-5 Both 351 and 1031 provide for nonrecognition of gain or loss for certain transfers which otherwise would be taxable. The principle behind the nonrecognition of gain or loss is the concept of continuity of the taxpayer's investment. As there is no real change in the taxpayer's economic status, gain or loss should be postponed until such a change occurs (i.e., a sale to or a taxable exchange with outsiders). In addition, this approach can be justified under the wherewithal to pay concept discussed in Chapter 1. pp. 4-2 and 4-3 Gain is recognized on a 351 transfer if the transferor receives ``boot'' in the exchange (i.e., money or property other than stock). Gain is recognized to the extent of the lesser of the gain realized or the boot received (the amount of money and the fair market value of the other property received). The nature of any gain recognized is characterized by reference to the type of asset transferred. Loss is never recognized. pp. 4-3 and 4-4 Services are not considered to be property under 351; therefore, Ray must report as income the fair market value of the Orange stock received. Ray's basis in the stock will be its fair market value. Example 3 The transfer of a liability is normally treated as the receipt of boot by the transferor. But such boot is taxed only to the extent of any realized gain that results. Although 357(a) exonerates liabilities from boot treatment in 351 transfers, it contains two exceptions. One exception, 357(c), provides for gain recognition on the excess of the liability over the basis of the property transferred. The exception creates gain and applies regardless of whether realized gain is present. pp. 4-4 and 4-10 Yes. Nonqualified preferred stock as well as cash, securities, and other property constitute boot under 351. p. 4-5 The control requirement specifies that the person or persons transferring property to the corporation must own, immediately after the transfer, stock possessing at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock of the corporation. Control may apply to a single person or to several taxpayers if they are all parties to an integrated transaction. p. 4-6 a. If a shareholder renders services to the corporation for stock, the control requirement can be lost as to the other shareholders. The shareholder rendering services, absent any additional transfer of property for stock, cannot qualify under 351 because services rendered are not ``property.'' For example, if Adam transfers property to Brown Corporation for 50% of the stock and Bonnie receives 50% of the stock for services rendered, the transaction is taxable to both Adam and Bonnie. Bonnie is not a member of the group transferring property, and Adam receives only 50% of the stock. The post-control requirement is not met. Example 8 If a shareholder renders services and transfers property to the corporation for stock, the shareholder is treated as a member of the transferring group although taxed on the value of the stock received for services. Consequently, in part a. above, if Bonnie also transferred property, the transaction would qualify under 351. To be a member of the group and to aid in qualifying all transferors under the 80% test, the person contributing services must transfer property having more than a relatively small value in relation to the services he or she performed. Examples 9 and 10 If a shareholder has only momentary control of the stock of the corporation after the transfer, these shares do not count in determining control if the plan for ultimate sale or other disposition of the stock existed before the exchange. Example 7 2. 3. 4. 5. 6. b. c. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-6 d. 2007 Corporations Volume/Solutions Manual If a long period of time elapses between the transfers of property by different shareholders, the control requirement may be lost as to the later transfers because there is no transferring group. The Regulations affirm that an exchange involving more than one person does not necessarily require simultaneous transfers by the persons involved, but there must be a transaction in which the rights of the parties were previously defined and the transaction occurs shortly thereafter. Transfers that involve a long lapse of time should be properly documented as part of a single plan. Contrast Examples 4 and 5 7. In the proposed incorporation of ``The Perfect Cat,'' the following issues arise: l Will the transfer be subject to the tax-free treatment of 351? Will Margaret receive stock in exchange for property transferred? If Margaret is not a transferor of property, how will her receipt of stock be classified for tax purposes? In other words, is the receipt of stock a gift from her mother, or is it in exchange for services rendered to the business? If Margaret is not a transferor of property and she receives stock from the corporation, will the transaction preclude 351 treatment for Nancy? What will be the basis in the stock received by Nancy and by Margaret? What will be the basis of the property in the hands of the corporation? What will be the amount of income recognized by Margaret and the deduction allowed if the transfer of stock to Margaret is for services rendered? What will be the gift tax consequences if the transfer of stock by Nancy to Margaret is considered a gift? Chapter 17 l l l l l l l Example 6 and relevant discussion 8. If the real estate is appreciated, either approach results in gain being recognized by Randall. The receipt of bonds (i.e., securities) results in a sale of the real estate, and the realized gain is recognized. The mortgage scenario yields a like consequence. One possible alternative is to use preferred stock. This could give Randall more security than common stock, particularly if the preferred stock has a liquidation preference. To be nontaxable, however, the transfer should be tied to the original incorporation of the business. Otherwise, the 80% control requirement might not be satisfied. In addition, to avoid being considered boot, the preferred stock received must not meet the definition of nonqualified preferred stock. pp. 4-5, 4-8, and 4-9 It appears that the exchange qualifies under 351. Control is not lost if stock received by a shareholder in a 351 exchange is sold or given to others who are not parties to the exchange shortly after the transaction unless there was a binding agreement for such transfer before the exchange. Assuming the subsequent transfer is completely donative, it should be disregarded for purposes of the control requirement. Example 7 A transferor who receives stock for both property and services can be included in the control group if the value of property transferred is not relatively small in comparison to the value of the services rendered in exchange for stock. The IRS generally requires that the value of the property transferred must be at least 10% of the value of the services provided. If the value of the property transferred is less than this amount, the IRS will not issue an advance ruling that the exchange meets the requirements of 351. pp. 4-7 and 4-8 9. 10. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure 11. a. 4-7 Ted is attempting to meet the control requirements of 351. In order to qualify as a nontaxable exchange under 351, the person or persons transferring property to a corporation for stock must own immediately after the transfer, stock possessing at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock of the corporation. Unless Peggy joins Ted in the transaction, he will not meet the control requirement and must recognize gain of $80,000 on the transfer. A transferor's interest cannot be counted if the stock received is of relatively small value in comparison to the value of that already owned and the primary purpose of the transfer is to qualify other transferors for 351 treatment. For advance ruling purposes, the IRS treats the amount transferred as not being relatively small in value if it is equal to, or in excess of, 10% of the fair market value of the stock already owned by that person. Thus, if the one share of stock transferred to Peggy is less than 10% of the stock already owned by Peggy, Peggy's interest probably is not counted. Ted then is taxed on the transfer as he does not have an 80% interest in Robin Corporation. b. pp. 4-7 and 4-8 12. 13. The shareholder's basis in the stock received is reduced by the amount of the liabilities assumed by the corporation. p. 4-9 Libbie would probably not be taxed as to the liabilities assumed by the corporation. Section 357(b) provides that if the principal purpose of the assumption of liabilities by the corporation is to avoid tax or if there is no bona fide business purpose behind the exchange, the liabilities are treated as money received and taxed as boot. The bona fide business purpose requirement causes difficulty if the liability is taken out shortly before the property is transferred and the proceeds are utilized for personal purposes. This is not the case here, since the mortgage proceeds are used to improve the property transferred to the corporation. p. 4-9 Section 357(c) requires the transferor of property to recognize gain if the corporation assumes liabilities in excess of the basis of the assets transferred. Without this provision, a taxpayer would have a negative basis in the stock received. Section 357(c) precludes the negative basis possibility by treating the excess over basis as gain to the transferor. Example 16 a. If a shareholder receives ``other property'' (boot) in addition to stock in a 351 transfer, gain is recognized to the shareholder to the extent of the lesser of the gain realized or the fair market value of the boot received. Section 358(a) provides that the basis of stock received is the same as the basis the shareholder had in the property transferred, increased by any gain recognized on the exchange and decreased by boot received. If a shareholder transfers a liability to the corporation along with property, the basis in the stock received is reduced by the amount of the liability transferred to the corporation. However, the transfer of the liability to the corporation will not produce gain to the transferor-shareholder (unless the liability exceeds the basis of the assets transferred or there was a tax avoidance scheme or no bona fide business purpose underlying the transfer). The shareholder's basis in the property transferred becomes the basis of the stock received, increased by the amount of gain recognized to the shareholder and decreased by the fair market value of boot received and the amount of liabilities transferred to the corporation. In the event a shareholder transfers property with an aggregate adjusted basis in excess of its fair market value, the result reached in c. above may need to be 14. 15. b. c. d. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-8 2007 Corporations Volume/Solutions Manual modified. Section 362(e)(2) generally requires the corporation to step down the carryover basis for the property by the amount of the net built-in loss. However, if the shareholder and the corporation elect, the basis reduction can be applied instead against the shareholder's stock basis. Figure 4-1 16. If the services performed constitute an ordinary and necessary business expense (e.g., the shareholder serves as the office manager), the corporation may deduct the value of the stock issued. Otherwise, the cost must be capitalized. For example, accounting or legal services provided by a shareholder in organizing the corporation must be capitalized. Compare Examples 23 and 24 Mallard Corporation's holding period includes the transferor-shareholder's holding period. As to stock received, a shareholder's holding period depends on whether the asset transferred was capital (including 1231) or not. p. 4-14 The basis rules are not the same for property acquired from a shareholder and for property acquired from a nonshareholder. The basis of property received by a corporation from a shareholder as a capital contribution generally is the basis in the hands of the shareholder although it is subject to a downward adjustment when loss property is contributed. The basis of property transferred to a corporation by a nonshareholder as a contribution to capital is zero. pp. 4-15 and 4-16 The advantages of utilizing debt are numerous. Interest on debt is deductible by the corporation, while dividend payments are not. Further, the shareholders are not taxed on the receipt of loan repayments unless they exceed basis. With respect to equity, as long as a corporation has earnings and profits it is difficult to withdraw the investment without triggering dividend income. However, beginning in 2003, individual investors may prefer dividend income to interest income. Dividend income is taxed using preferential capital gains rates while interest income is taxed as ordinary income. pp. 4-16 and 4-17 a. b. c. If a loan is on open account, it is more easily characterized as a contribution to capital than a loan evidenced by a note. If a loan is payable on demand, it does not have a definite maturity date and can more easily be characterized as a contribution to capital. If a corporation has not made timely payments on a loan with a definite maturity date, it can more easily be characterized as a contribution to capital. An individual's failure to insist upon timely repayment (or satisfactory renegotiation) indicates that the repayment terms extend beyond the stated maturity date. If repayments are contingent upon earnings, the loan is more easily characterized as a contribution to capital. When debt and equity obligations are held in the same proportion, the debt is more likely to be classified as equity. Further, funds used to acquire capital assets are generally obtained through equity investments. Thin capitalization occurs when there is a high proportion of shareholder debt relative to shareholder equity. Whether a shareholder debt to shareholder equity ratio of 5:1 is excessive depends on the facts of the particular situation. In certain cases, courts have held a debt-equity ratio of approximately this proportion not to be excessive. 17. 18. 19. 20. d. e. f. pp. 4-17 and 4-18 Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure 21. 4-9 Julie is not completely correct about the tax result. Only if 1244 is applicable will ordinary loss treatment result. Further, for a single taxpayer, a maximum of only $50,000 qualifies. Consequently, Julie will have an ordinary loss of $50,000 and a capital loss of $25,000. p. 4-21 If a shareholder lends money to a corporation in his or her capacity as an investor, any resulting bad debt generally is classified as nonbusiness. However, if the loan is made in some capacity that qualifies as a trade or business, the shareholder-creditor can incur a business bad debt. Employee status is a trade or business, and a loss on a loan made to protect the shareholder's position as an employee qualifies for business bad debt treatment. Shareholders also may receive business bad debt treatment if they are in the trade or business of lending money or of buying, promoting, and selling corporations. The ``dominant'' or ``primary'' motive for making the loan controls the classification of the loss. pp. 4-19 and 4-20 22. 23. a. No deduction is allowed for a mere decline in value of property. A deduction may be taken as a loss from the sale or exchange of a capital asset on the last day of the taxable year in which stock becomes completely worthless. [ 165(g)(1)]. Here the stock is not completely worthless. No deduction is permitted for a loss on a sale of property to a related party. 267(a)(1) Ralph may deduct a loss on a sale to a third party. Loss is established through a sale or exchange. No deduction is permitted for a loss on a sale of property to a related party under 267(a)(1). For this purpose, however, Ralph's aunt is not considered to be a related party. See 267(b)(1) and (c)(4). Therefore, Ralph may deduct a loss in this case, since it is like a sale to any other unrelated third party. Loss is established through a sale or exchange. Ralph may deduct an ordinary loss only if the stock is not a capital asset or if it is 1244 stock. If Ralph was a broker and the stock was held for resale to his customers, he would have an ordinary loss. Normally, however, stock is held as investment property and is a capital asset. In that case, the loss would be a capital loss unless 1244 applies. b. c. d. e. pp. 4-19 and 4-20 24. Keith is attempting to enjoy the benefits of gain deferral and, at the same time, avoid the loss deferral aspects of 351. In selling the loss assets for cash, instead of exchanging them for stock, a taxable event results, and losses can be recognized. However, the plan probably will not succeed. Because the sale is so close in time to the formation of the corporation, the IRS would collapse the sale and take the approach that the transfer of the loss assets also falls under 351. But even if the sale could be disassociated from 351, the loss disallowance rules of 267 would apply to disallow the loss. Section 267 disallows a loss deduction for exchanges between a shareholder and a corporation in which the shareholder owns more than 50% in value of the stock. pp. 4-22 and 4-23 25. Leasing some property to a controlled corporation may be a more attractive alternative than transferring ownership. Leasing provides the taxpayer with the opportunity of Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-10 2007 Corporations Volume/Solutions Manual withdrawing money from the corporation without the payment being characterized as a dividend. If the property is donated to a family member in a lower tax bracket, the lease income can be shifted as well. If the depreciation and other deductions available in connection with the property are in excess of the lease income, the taxpayer would retain the property until the income exceeds the deductions. p. 4-24 PROBLEMS 26. a. b. c. d. e. f. g. h. i. j. k. $6,000 ordinary gain. $30,000 [$30,000 (basis of inventory) + $6,000 (gain recognized) $6,000 (boot received)]. $36,000 [$30,000 (basis of inventory) + $6,000 (gain recognized)]. Carl recognizes gain of $9,000 (the amount of cash received). The gain is ordinary income because of the 1245 depreciation recapture provisions. Carl has a basis of $45,000 in the Pine Corporation stock, computed as follows: $45,000 (basis in the equipment) + $9,000 (gain recognized) $9,000 (boot received). Corporation Pine has a basis of $54,000 in the equipment, computed as follows: $45,000 (basis of the equipment to Carl) + $9,000 (gain recognized by Carl). Lucy has no recognized gain or loss. A secret process is property for purposes of 351. Lucy has a basis of $15,000 in the Pine Corporation stock. Pine Corporation has a basis of $15,000 in the secret process. Sylvia has no taxable income on the transfer. Sylvia has a basis of $30,000 in the Pine Corporation stock. pp. 4-4, 4-11, and Figures 4-1 and 4-2 27. a. b. c. d. e. f. g. $0. $190,000. $140,000. $0. $285,000. $125,000 (basis in the equipment) and $10,000 (basis in the patent). The answers would not change. There is no requirement that the transferors receive the same type of stock. Further, both common stock and most preferred stock qualify as ``stock.'' However, if Gail received ``nonqualified preferred stock,'' her realized gain would be recognized because this type of preferred stock is treated as boot. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure h. 4-11 The answers would not change. There is no requirement that the transferors be individuals. pp. 4-4, 4-5, 4-11, and Figures 4-1 and 4-2 28. a. b. c. None of the three individuals will recognize gain or loss. The nonrecognition provisions of 351 apply to all the exchanges. Example 5 Clyde will recognize loss of $180,000 ($1,000,000 $1,180,000) on the exchange. Example 4 The parties could structure the transaction to avoid having Clyde as part of the control group. This would allow Clyde to recognize the $180,000 loss and produces an immediate tax benefit to him. This benefit comes with the cost of a reduced stock basis to Clyde (from $1,180,000 to $1,000,000). p. 4-23 Hoffman, Raabe, Smith, and Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 March 29, 2006 Mr. Jim Yancey 1635 Maple Street Syracuse, NY 13201 Dear Mr. Yancey: This letter is in response to your question as to whether you must report gain on the transfer of property to Red Corporation for 75% of the stock in Red. Our conclusion is based on the facts as outlined in your March 12 letter. Any change in facts may cause our conclusion to be inaccurate. The property you transferred had a tax basis of $200,000 and a fair market value of $850,000. You received stock representing a 75% interest in Red Corporation in consideration for your transfer of the property. The other 25% interest is owned by Joy Perry, who acquired her shares several years ago. Because the interest you acquired in Red Corporation represents less than an 80% interest in Red Corporation, you must report gain on the transfer. Your gain will be $650,000 [$850,000 (value of the stock received) $200,000 (your tax basis in the property transferred)]. Should you need more information or need to clarify our conclusion, do not hesitate to contact me. Sincerely, Martha R. Harris, CPA Partner 29. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-12 2007 Corporations Volume/Solutions Manual TAX FILE MEMORANDUM March 17, 2006 FROM: Martha R. Harris SUBJECT: Jim Yancey Today I talked to Jim Yancey with respect to his transfer of appreciated property to Red Corporation in which he obtained only a 75% stock interest. The remaining 25% interest was held by Joy Perry, who acquired her interest several years ago. At issue: Must a shareholder recognize gain on the transfer of appreciated property to an existing corporation if the shareholder has less than an 80% control of the transferee corporation after the transfer? Conclusion: Yes. To qualify as a nontaxable transaction under 351, the transferor must be in control of the transferee corporation immediately after the exchange. Control means that the person or persons transferring the property must have an 80% stock ownership in the transferee corporation. The transferor shareholder must own stock possessing at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock. Control can apply to a single person or to several individuals if they are parties to an integrated transaction. In this case Joy acquired her interest in the corporation several years ago; thus, she would not be part of the transaction involving Jim. Because Jim obtained only a 75% interest in Red Corporation, the transfer is a taxable exchange. Jim must recognize gain measured by the excess of the fair market value of the stock received over the tax basis of the property he transferred. Therefore, the gain he recognizes is $650,000 ($850,000 $200,000). p. 4-6 30. l Were Barbara's and Alice's transfers part of an integrated transaction? Was there an agreement between Barbara and Alice regarding the transfers? Because Alice is Barbara's daughter, can her stock be counted as Barbara's in computing Barbara's stock ownership? l l pp. 4-6 and 4-8 31. a. The transfers will qualify under 351. Vera's stock is counted in determining control for purposes of 351; thus, the transferors own 100% of the stock in Crane. All of Vera's stock, not just the shares received for the machinery, is counted in determining control because property she transferred has more than a nominal value in comparison to the value of the services rendered. Dan recognizes no gain on the transfer of the land. His basis in the Crane stock is $60,000, his basis in the land. Vera recognizes gain of $50,000 on the transfer. Even though the transfer of the machinery qualifies under 351, her transfer of services for stock does not. Vera has a basis of $80,000 in her Crane stock [$30,000 (basis of the machinery) + $50,000 (value of her services)]. b. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure c. 4-13 Crane Corporation has a basis of $60,000 in the land and a basis of $30,000 in the machinery. Crane either has a deduction of $50,000 for the services provided by Vera, or it will capitalize the $50,000 as organization costs. pp. 4-7, 4-8, Example 11, and Figures 4-1 and 4-2 32. Juan must recognize $250,000 of gain on the transfer [$400,000 (value of the shares received) $150,000 (basis in the property transferred)]. The transfer does not qualify under 351. Although Juan originally owned 100% of Red Corporation, he only owns 60% after the transfer [2,000 (shares originally owned) 1,000 (shares transferred to Julie and Rachel) + 500 (shares acquired in the transfer), or 1,500 shares of a total of 2,500 shares]. Julie and Rachel's stock ownership cannot be counted because the stock attribution rules of 318 (see Chapter 6) do not apply to a 351 transfer. Example 12 a. Ann does not recognize a gain. Bob recognizes a gain of $15,000, the value of the services Bob rendered to the corporation. Bob does not recognize gain on the transfer of property to the corporation. Examples 3 and 11 Ann has a basis of $150,000 in the stock in Robin Corporation. Bob has a basis of $45,000 in his stock in Robin Corporation [$30,000 (basis in property transferred) + $15,000 (gain recognized)]. Figure 4-1 Robin Corporation has a basis of $150,000 in the property Ann transferred and a basis of $30,000 in property Bob transferred. Robin Corporation capitalizes $15,000 as organization costs. Figure 4-2 and Example 24 33. b. c. 34. To be a member of the control group and aid in qualifying all transferors under the 80% test, a person contributing services must transfer property having more than a relatively small value in relation to the services performed. Stock issued for property of relatively small value compared with the value of the stock to be received for services rendered by the person transferring such property will not be treated as issued in return for property. The value of property transferred by Bob is less than 10% of the value of the services he provided. Bob will probably not qualify as a member of the control group. If Bob does not qualify as a member of the control group, Ann's transfer will also not qualify under 351. Ann transferred property for only 70% of the stock. Therefore, both Ann and Bob would recognize gain on the exchanges. Robin's basis in the property transferred by Ann and Bob will be $420,000 and $15,000, respectively. Examples 9 and 10 In addition to her cash salary, Kim has ordinary income of $10,000 [10 (shares of stock in Azure Corporation) $1,000 (value of each share)]. Azure Corporation has a 162 deduction of $10,000. Example 23 a. The transaction is fully taxable because Rhonda, the sole transferor of property, does not have control immediately after the transaction. Therefore, all of the realized gain is recognized. Amount realized--stock Less: Adjusted basis of property transferred Realized gain Recognized gain Example 12 $200,000 (15,000) $185,000 $185,000 35. 36. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-14 b. 2007 Corporations Volume/Solutions Manual With the change, Rhonda is trying to avoid recognizing the $185,000 gain. The plan involves Rachel becoming a transferor of property along with Rhonda so that together they would meet the 80% control test. If Rhonda is part of a group that meets the control test, she would avoid recognizing the gain. However, this plan will not be successful. Rachel's interest cannot be counted since the value of the stock she would receive is relatively small compared to the value of the stock she already owns. In addition, Rachel's contribution would be made primarily to qualify Rhonda for 351 treatment. p. 4-22 The following alternatives would enable Rhonda to avoid gain recognition: l c. Rhonda can transfer property that has not appreciated in value. For example, if she were to contribute $200,000 of cash to Peach, Rhonda would not recognize gain on the transaction. Rachel could contribute property of an amount that is not small relative to the value of the stock already owned. By doing so, she would be considered a transferor of property along with Rhonda, and together, they would have control. As a result, Rhonda would avoid gain recognition. For example, if the value of Rachel's stock is worth approximately $200,000 prior to the contribution, a transfer of at least $20,000 would likely be sufficient to avoid the relative-small-in-value test. p. 4-22 l 37. Paul recognizes a gain of $10,000 on the transaction under 357(c) [$60,000 (liability) $50,000 (basis in the transferred property)]. Paul has a zero basis in the stock in Swift Corporation, computed as follows: $50,000 (basis in the property transferred to Swift Corporation) $60,000 (liability) + $10,000 (gain recognized). Swift Corporation has a basis of $60,000 in the property computed as follows: $50,000 (basis to Paul) + $10,000 (gain recognized by Paul). Examples 16 and 19 Lori recognizes no gain on the transfer. The problem concerns the application of 357(c) since liabilities would exceed basis in the assets if the trade payables are considered for purposes of 357(c). Accounts payable of a cash basis taxpayer that give rise to a deduction when paid are not included as liabilities for purposes of applying 357(c). Consequently, the liabilities (notes payable of $360,000) do not exceed the basis of the assets transferred ($400,000). Lori has a basis of $40,000 in the stock in Green Corporation [$400,000 (basis in the assets transferred to Green Corporation) $360,000 (liabilities assumed by Green Corporation)]. Green Corporation has a basis of $400,000 in the assets received from Lori. pp. 4-10, 4-11, and Figures 4-1 and 4-2 38. 39. a. Both 357(b) and 357(c) are applicable. The land is subject to two mortgages that are in excess of basis, causing 357(c) to be applicable. Allie has a gain of $350,000 [($375,000 + $100,000) $125,000] on the transfer pursuant to 357(c). Section 357(b) also is applicable because Allie borrowed the $100,000 shortly before incorporating and used the funds for personal purposes. Section 357(b) causes all liabilities to be tainted; thus, Allie has boot of $475,000. This generates taxable gain of $475,000, the amount of the boot. Her realized gain is $650,000 [$300,000 (value of stock received) + $475,000 (release of liabilities) $125,000 (basis of land)]. The realized gain is taxed to the extent of the boot received, or $475,000. When both 357(b) and 357(c) apply to the same transaction, 357(b) predominates. Blue Corporation has a basis of $600,000 in the land, computed as follows: $125,000 (carryover basis from Allie) + $475,000 (gain recognized to Allie). Allie Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure 4-15 has a $125,000 basis in the stock, computed as follows: $125,000 (basis in the land) + $475,000 (gain recognized) $475,000 (liabilities assumed by Blue Corporation). b. Section 357(b) would no longer be applicable if Allie does not take out the second mortgage. However, 357(c) will apply. Allie will have a taxable gain under 357(c) of $250,000, computed as follows: $375,000 (liabilities assumed by Blue Corporation) $125,000 (basis in the property transferred to Blue). Allie's basis in her stock will be zero, computed as follows: $125,000 (basis in the land transferred to Blue) + $250,000 (gain recognized by Allie) $375,000 (liabilities assumed by Blue). Blue Corporation will have a basis of $375,000 in the assets, computed as follows: $125,000 (carryover basis from Allie) + $250,000 (gain recognized to Allie). pp. 4-9 to 4-12 40. The $440,000 in liabilities of the proprietorship ($80,000 trade payables and $360,000 bank loan) exceed the $400,000 tax basis of the property transferred. If all of the liabilities are included under 357(c), Fay would have a taxable gain of $40,000 (the excess of the liabilities over her tax basis). However, the accounts payable of a cash basis taxpayer that give rise to a deduction are not considered to be liabilities for purposes of 357(c). Thus, the $80,000 of trade payables are not included, liabilities do not exceed basis, and no gain is recognized. Fay has a basis of $40,000 in the stock in Robin Corporation [$400,000 (basis in the properties transferred to Robin Corporation) $360,000 (bank loan assumed by the corporation)]. Robin Corporation has a basis of $400,000 in the assets transferred to it by Fay. pp. 4-9 to 4-12 41. a. b. Sara does not recognize gain on the transfer. Jane has income of $15,000, the value of the services she renders to Wren Corporation. Wren Corporation has a basis of $25,000 in the property it acquires from Sara and a basis of $10,000 in the property it acquires from Jane. It has a $15,000 business deduction under 162 for the value of the services Jane renders. Example 23 42. a. b. Jane has income of $15,000 for the value of the services rendered. Wren Corporation has a basis of $10,000 in the property it acquires from Jane. It must capitalize the $15,000 as an organizational expense. Example 24 43. There are no tax consequences to Carol. Carol has no recognized gain and no accelerated cost recovery to recapture when she transfers the machinery to Lark Corporation in exchange for stock. Lark Corporation has a taxable gain of $75,000 on the sale of the machinery, all of which is ordinary income under 1245. Lark has a basis of $20,000 in the machinery. The recapture potential of the machinery carries over to the corporation; thus, Lark has to take into account the 1245 recapture potential originating with Carol. Example 25 Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-16 44. a. b. c. 2007 Corporations Volume/Solutions Manual Blue Corporation does not recognize any income from the receipt of land and cash. The receipt is viewed as a capital contribution and not taxed pursuant to 118. Blue has a zero basis in the land. Blue Corporation must apply the $1 million cash against the cost of the building and the inventory (in this order). Therefore, the basis of the building is zero, and the basis of the inventory is $100,000. pp. 4-15, 4-16, and Example 27 45. Hoffman, Raabe, Smith, and Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 June 5, 2006 Ms. Emily Patrick 36 Paradise Road Northampton, MA 01060 Dear Ms. Patrick: This letter deals with the tax treatment that applies following the bankruptcy of Teal Corporation this year. Under the facts given, Teal Corporation was formed a number of years ago with an investment of $200,000 cash in return for which you received $20,000 in stock and $180,000 in 8 percent interest-bearing bonds maturing in nine years. Later, you lent the corporation an additional $50,000 on open account. During the corporation's existence, you were paid an annual salary of $60,000. Because our conclusion is based on these facts, please inform us if our understanding is inaccurate. If the stock was issued pursuant to 1244 of the Internal Revenue Code, you have a $20,000 ordinary loss on the worthless stock. Otherwise, the $20,000 investment in the stock results in capital loss treatment. A danger exists that the IRS could argue thin capitalization and reclassify the long-term debt as equity. This produces a capital loss on that portion of your investment. Also, it could contend that both the long-term debt (regardless of whether it can be deemed hybrid stock) and the $50,000 open account are nonbusiness bad debts and, therefore, short-term capital losses. If the IRS makes this assertion, we would recommend that you counter with the argument that the $50,000 open account is a business bad debt. To do this you need to show that the primary motive in lending the money to Teal Corporation was to protect your employment with the corporation. Further, if you are in the business of lending money or of buying, promoting, and selling corporations, you might be able to deduct both the $180,000 and the $50,000 as business bad debts which are treated as ordinary losses. As this is a complicated situation, please call us if we may provide further assistance. Sincerely, Sarah Mitchell, CPA pp. 4-17 to 4-19 and Example 29 Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure 46. Hoffman, Raabe, Smith, and Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 November 15, 2006 Mr. Steve Ferguson, President Jaybird Corporation 555 Industry Lane Pueblo, CO 81001 Dear Mr. Ferguson: 4-17 This letter is in response to your question with respect to the tax treatment of loans in the amount of $300,000 each from your shareholders, Vera, Wade, and Wes. Our conclusion is based on the facts as outlined in your November 10 letter. Any changes in facts may cause our conclusion to be inaccurate. The corporation seeks additional capital in the amount of $900,000 to construct a building. Your equal shareholders, Vera, Wade, and Wes, propose to loan the corporation $300,000 each. The corporation will issue to each a four-year note in the amount of $300,000 with interest payable annually at two points below the prime rate. Jaybird's current taxable income is $2 million. Payments on the notes would probably be treated as dividends for tax purposes. The debt instruments have too many features of stock. The debt will not bear a legitimate rate of interest and it is proportionate to the stock holdings of Vera, Wade, and Wes. Because Jaybird has substantial current taxable income, the payment on the loans could indicate an attempt to withdraw earnings in the form of principal and interest payments on debt obligations rather than as dividend payments. Should you need more information or need to clarify our conclusion, do not hesitate to contact me. Sincerely, Susan K. Papenfuse, CPA Partner TAX FILE MEMORANDUM November 14, 2006 FROM: Susan K. Papenfuse SUBJECT: Jaybird Corporation Today, I conferred with Steve Ferguson, President of Jaybird Corporation, with respect to his November 10 letter. The corporation needs additional capital to construct a building in the amount of $900,000. The three equal shareholders of Jaybird Corporation, Vera, Wade, and Wes, each propose to loan Jaybird Corporation $300,000, taking from Jaybird a $300,000 four-year note with interest payable annually at two points below the prime rate. Mr. Ferguson informed me that Jaybird Corporation has current taxable income of $2 million. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-18 2007 Corporations Volume/Solutions Manual At issue: Would the loans of $300,000 each by Jaybird's shareholders represent debt or could the IRS successfully reclassify the debt as equity? Jaybird Corporation would want to deduct interest payments on the notes payable to its shareholders. Thus, it would not want the debt reclassified as equity as all payments, including payments on the principal, would be treated as dividends. The IRS has authority under 385 to characterize corporate debt wholly as equity or as part debt and part equity. Section 385 lists several factors that may be used to determine whether a debtor-creditor relationship or a shareholder-corporation relationship exists. If the debt instrument does not bear a reasonable rate of interest, the debt is susceptible to reclassification as equity. Further, if holdings of debt and stock are proportionate, the debt may be reclassified as equity. When debt and equity obligations are held in the same proportion, shareholders are, apart from tax considerations, indifferent as to whether corporate distributions are in the form of interest or dividends. When funds are loaned to finance capital asset acquisitions, the funds may also be reclassified as equity. Funds used to acquire capital assets a corporation needs to operate are generally obtained through equity investments. Conclusion: Should the shareholders of Jaybird Corporation loan it money in the form proposed, the IRS could probably successfully contend the debt was really an equity interest. The loans present a problem because the debt is proportionate to the stock holdings of Vera, Wade, and Wes. In addition, the interest rate is below the prime rate. Jaybird Corporation will use the funds to construct a building. This also indicates the debt is in reality an equity investment. pp. 4-16 to 4-19 47. 48. 49. Sam has an ordinary loss of $50,000 and a long-term capital loss of $40,000. Example 30 Kara has a long-term capital loss of $40,000. Only the original holder of 1244 stock qualifies for ordinary loss treatment. p. 4-21 Hoffman, Raabe, Smith, and Maloney, CPAs 5191 Natorp Boulevard Mason, OH 45040 July 28, 2006 Mr. Mike Sanders 2600 Riverview Drive Plank, MO 63701 Dear Mr. Sanders: This letter is in response to your question with respect to stock you held in a corporation that qualified as a small business corporation under 1244. Our conclusion is based upon the facts you provided us. Any change in facts may cause our conclusion to be inaccurate. Your brother, Paul, gave you the stock a few months after he acquired the stock. Paul paid $30,000 for the stock three years ago. You sold the stock this tax year for $10,000. You may deduct the difference between the selling price of the stock, $10,000, and the cost of the stock to your brother Paul, $30,000. When property is given to another, there is a carryover of the basis the donor had in the property. Thus, your tax basis in the stock will Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 Corporations: Organization and Capital Structure 4-19 be the $30,000 tax basis your brother, Paul, had in the stock. You will have a long-term capital loss of $20,000 on the sale of the stock. Because you were not the original holder of the stock, you may not take an ordinary loss deduction on the sale. Should you need more information or need to clarify our conclusion, do not hesitate to contact me. Sincerely yours, David C. Via, CPA Partner TAX FILE MEMORANDUM July 19, 2006 FROM: David C. Via SUBJECT: Mike Sanders Today I talked to Mike Sanders with respect to his sale of stock which was issued to his brother, Paul, pursuant to 1244. Paul paid $30,000 for the stock three years ago and gave the stock to his brother, Mike, a few months after he acquired it. Mike sold the stock in the current tax year for $10,000. At issue: May a donee of stock in a corporation that qualified as a small business corporation under 1244 take an ordinary loss deduction pursuant to 1244? Conclusion: No. Only the original holder of 1244 stock qualifies for ordinary loss treatment. p. 4-21 50. The shareholders of Blue Corporation have avoided pro rata holding of debt by having Mitch lease property to the corporation and receiving an annual rent that approximates the yield on the loans from Frank and Cora. Because the loans are not pro rata, the IRS may have difficulty in reclassifying the debt as equity. In addition, Blue Corporation can defend its debt-equity ratio by stressing the fair market value of its assets. If the tax basis of Blue Corporation's assets is used in determining its debt-equity ratio, it is 6 to 1 [$300,000 (liabilities) to $50,000 (tax basis of assets)]. However, if fair market value of its assets is used, the ratio is only .5 to 1 [$300,000 (liabilities) to $600,000 (value of assets)]. Thus, Blue appears to have an acceptable debt-equity ratio. Examples 34 to 36 The answers to the Research Problems are incorporated into the 2007 Corporations Volume of the Instructor's Guide with Lecture Notes to Accompany WEST FEDERAL TAXATION: CORPORATIONS, PARTNERSHIPS, ESTATES & TRUSTS. Path: K:/TL-WFT-05-0802/Application/TL-WFT-05-0802-004_V2-SM.3d Date: 11th April 2006 Time: 11:26 User ID: 40520 4-20 2007 Corporations Volume/Solutions Manual NOTES

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.Nathan Ellis Box 621 March 3, 2006 RnD6 1. Where was Laodicea? It was a town near Colossae. 2. What can you tell me about the Letter to the Laodiceans which is known in a Latin version? It's almost impossible to date. It really doesn't seem like som
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Chapter 271851 Treaties at Fort Laramie trying to pacify the Indians1855 Less than 1000 Buffalo were left1860's U.S. tried to put Indians into smaller reservations like the Dakota Territory1864 Battle at Sand Creek J.M. Chivington's militia
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R&D (Research & Development) 7researching the word, developing the soulPlease type your responses to the following questions: 1. What does the name Isaiah mean? The salvation of Jehovah 2. According to LOGOS Old Testament Survey Series: The Major P
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Key Connective FinallyMain Subjects Brothers -My ItMain Verbs Rejoice -In the Lord! IsCompletersAndIt [You]Is Watch outForItIsThough IfI myself Anyone elseHave ThinksIHaveNo trouble -For me to write the same things to yo
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Review for World Thought & Culture Test Three Literature and Literary Terms: Know Ovid's Metamorphoses - all of the ones talked about in class. There is no central hero. All of the stories involve metamorphoses, which binds them all together. Ovid is
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REVIEW FOR LITERATURE SECTIONS World Thought I TEST TWO 1.) Know Professor McGinniss lecture especially know the terms and phrases she put on the board. 2.) Know about Sophocles and his life. 3.) Know about Euripides. 4.) Know Aristotles elements of
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Review for World Thought & Culture Test 3 History, Science, Art- Rococo & Neo-Classical: 1. Know what realms the following Great Powers Absolutist families ruled: Valois & Bourbon / Habsburgs / Hohenzollerns = Prussia / Romanovs / and Stuart & Hanov
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Bible Study Written by 36 authors Over 1500 years In 3 Continents Asia, Europe, Africa In 3 languages Greek, Hebrew, Aramaic Best preserved ancient document United throughout Formal Correspondence Word for word Dynamic Equivalence Thought for thought
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Nathan Ellis September 16, 2005 Biblical Survey 1:00 Kersey Box #621 1. The Israelites went three days after they parted from the Red Sea before complaining. 2. According to Exodus 13:17-22, God appeared to them in a pillar of fire and cloud during t
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Name: Nathan Ellis_Box#: 621_R&D (Research & Development)3researching the word, developing the soulPlease type your responses to the following questions: 1. According to Leviticus, Numbers, and Deuteronomy, should an Israelite ever have his i
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Review Sheet Test #4. World Thought & Culture2005 by Courtney McLain 1. Identify the following: Ch'in, Great Wall, Jade, tomb of Qinshihuang, silk, Silk Road, elixirs, social ranks, royal color; invention: paper, printing, gun powder, Sun Tzu, 12 Y
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World Thought Review FinalHistory section: 1. Know the following related to Islam: the three historical textual, purpose driven faiths & their common ancestor, Muhammad, Quran, Kaaba, Mecca, Islamic view of Jesus and of God, Five Pillars, Dome of t
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Nathan Ellis December 9, 2004 AP History Chapter 20 Timeline Year 1850 Event The Compromise of 1850 Later, Northerners would go to Kansas, and South got pissed cause they thought it was going to be a slave state, and the more Northerners that came i
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Nathan Ellis AP History January 6, 2005 Chapter 23 I. The Problems of Peace a. Now that the war was over, they didnt know what to do with the blacks that had been free, and they werent sure how to integrate them peacefully back in the south. b. From
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Nathan Ellis Box #621 February 17, 2006 BI123 Research and Development 4 1. The background of Romans. The Roman church was a predominantly Gentile church that had not yet received the teaching of an apostle. Paul thought it was necessary to describe
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Nathan Ellis Box #621 January 20, 2006 Bible Survey 1:00 K. KerseyR&D (Research & Development)1researching the word, developing the soulPlease type your responses to the following questions: *Read "From Jesus of Nazareth to early Christianity"
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Nathan Ellis Box #621 Bib Lit 1:00 Kent Kersey R&D 8Please type your responses to the following questions: 1. According to the Old Testament Survey Series, what do we know about Ezekiel's family and station? Ezekiel was of a priestly family, his fa
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Nathan Ellis Box #621 December 9, 2005 Bib Lit Pastor Kersey R&D 10 I. The Dawning of a New Day (Isa. 60:1-22) a. Israel kept messing up so God kept leaving and coming back b. A day will come when God returns and stays, and people from everywhere wil
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Nathan Ellis AP History February 1, 2005 Chapter 29 Yellow Journalism o The media makes fake stories just to get people worked up, giving the public views that the media wants them to have, sometimes to benefit the media. Captain Alfred Thayer Mahan
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Nathan Ellis AP History February 10, 2005 Chapter 30 Terms Panama Canal Due to the Clayton-Bulwer treaty with Britain, we weren't allowed to build a canal, but because they wanted to get on our good side, we passed the HayPauncefote Treaty we were a
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Nathan Ellis February 15, 2005 AP US History Chapter 31 Terms Muckraker Also known as dirt-diggers, these were people who would write things that weren't well known to the public and that gave people a bad view of big corporations or companies. For