Fed Taxation

1.

FASB’s simplification efforts also targets deferred income taxes.  Please examine the implications of FASB simplification efforts on reporting requirements for deferred income taxes.

FASB continues simplification efforts Presentation of deferred income taxes changes under a new standard. February 1, 2016 –

http://www.journalofaccountancy.com/issues/2016/feb/fasb-simplification-efforts.html

2.

• Imagine that you work in an accounting firm and your boss has requested you to present an overview of the tax structure to your organization. Two presentations have been requested.
  The first is a presentation that explains the differences between the company’s effective tax rate, cash tax rate, and structural tax rate. The second presentation should highlight the difference between a deferred asset and deferred liability.
  Select either presentation, highlight the points that should be included, and briefly explain how these rates are used in your company and what benefits, if any, could be gained from switching between these rates. Determine how a company benefits from classifying a transaction as a deferred asset or a deferred liability on the balance sheet.

Taxation of Shareholder Benefits” Please respond to the following:

• If a company experiences a complete loss of an office building as a result of a fire and receives a $2 million recovery payment from the insurance company:
  • Explain the tax consequences if the company decides not to rebuild.
  • Identify the tax consequences if the company distributes the $2 million to its two (2) shareholders, assuming that no stock was exchanged in return.
  • Under what conditions will the distribution meet the requirements to be treated as a partial liquidation and not a dividend?
  • 4.
  • •  
    • Discuss the options for a company to raise funds. Identify at least two (2) reasons that a company might prefer to issue debt rather than equity for tax purposes. Determine how the holders of the instruments view the advantages and disadvantages of holding each instrument. Defend your position. Please respond to the following:Balancing the Debt and Equity”