Corporate TaxesPaper instructions:.1. Your client is starting a new business. Your client is the sole shareholder and transferred cash in exchange for all of the stock. The corporation will incurvarious start-up expenses prior to the business opening. Research the tax treatment of start-up expenditures,.including the point at which a corporation begins fordetermining what expenses are included. In your initial discussion post include a summary of a court case that dealt with the above issue.2. Tina is the only shareholder of Edgecombe Corporation. Tinas stock basis is $100,000. She materially participates in the business and receives an annualsalary of $50,000. Current economic conditions have caused cash flow issues for the corporation so Tina needs to transfer $60,000 to the business..Tina is trying todetermine the best way to structure the cash transfer: a capital contribution, a loan to protect the stock investment or a loan to protect her salary. From a taxperspective, how would you advise Tina to structure the transaction in the event economic conditions continue to decline and the corporation may have to file forbankruptcy? Support your position with primary tax authority..
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