Part1. Evaluation of Income Tax Issues (80 Possible Points).

Tom & Donna have asked you to analyze and advise them of the tax consequences

of the sale to Tom M Oil Inc. Tom M & Donna M.

Tom M Oil Inc. has always been an S Corporation. Tom and Donna filing status is

married filing jointly.

For the purposes of your evaluation in this assignment, your clients are Tom and

Donna, and are your only concern! Do not analyze or evaluate the consequences to

the Buyer!

This assignment involves writing a Memorandum evaluating the Income Tax results

for Tom M Oil Inc., Tom M and Donna M.

Your memo will evaluate qualitatively and quantitatively the sale of assets and

liquidation of Tom M Oil Inc. You must discuss all applicable rules and show all

calculations.

Your Memo addresses only the Income Tax Issues of this scenario - do not

discuss operational or any non-tax issue. If you do, points will be deducted.