GDB4 Acct

GDB4 Acct - 30th April 2011 Module 7, Group 5, GDB 4 RE:...

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30th April 2011 Module 7, Group 5, GDB 4 RE: Question 5: Respond to the ethical considerations case below. Mathias has been the sole proprietor of a clothing store for many years. He intends to retire after holding a "liquidation sale". He wants to avoid ordinary income from the sale of the business inventory, so he shuts down the store for one month and then begins the liquidation sale. Mathias tells you (his tax return preparer) to report the liquidation sale proceeds as capital gain because he was no longer using those assets in a business at the time of the sale, but was holding them for investment. Evaluate the propriety of Mathias's plan. Justify your answer. Mathia’s wanted to minimize his tax liability by shifting the proceeds from the liquidation sale to capital gains. His liquidation sale, I assume, will include shelving, clothing, displays, mannequins, cleaning equipment, etc.
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This note was uploaded on 07/19/2011 for the course ACCT 302 taught by Professor S during the Spring '11 term at Lee.

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GDB4 Acct - 30th April 2011 Module 7, Group 5, GDB 4 RE:...

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