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34.Hoffman, Raabe, Smith, and Maloney, CPAs5191 Natorp Boulevard Mason, OH 45040 December 3, 2012 Mr. Joseph ThomsonJay Corporation1442 Main StreetFreeport, ME 04032Dear Mr. Thompson:I have evaluated the proposed alternatives for your 2012 year-end contribution to the University of Maine. I recommend that you sell the unimproved land and donate the proceeds to the University. The four alternatives are discussed below.Donation of cash, the unimproved land, or the Maize stock each will result in a $200,000 charitable contribution deduction. Donation of the Brown corporation stock will result only in a $70,000 charitable contribution deduction.Contribution of the land will result in less desirable outcome from a tax perspective. However, you will benefit in two ways if you sell the land and give the $200,000 in proceeds to the University. Donation of the proceeds will result in a $200,000 charitable contribution deduction. In addition sale of the land will result in $110,000 long term capital loss. If Jay Corporation had capital gains of at least $110,000 and paid corporate income tax in the past three years, the entire loss can be carried back and Jay will receive tax refunds for the carry back years. If Jay Corporation had no capital gains in the carry back years, the capital loss can be carried forward and offset against capital gains of the corporation for up to five years.
Nathalia GomezChapter 17 homeworkFebruary 23, 2015Federal Income taxes 2Jay Corporation should make the donation in time for the ownership to change hands before the end of the year. Therefore, I recommend that you notify your broker immediately so there will beno problem in completing the donation on a timely basis.I will be pleased to discuss my recommendation in further detail if you wish. Please call me if you have questions. Thank you for consulting my firm on this matter. We look forward to servingyou in the future.Sincerely, Nathalia Gomez, CPA