Explore BrainMass

Explore BrainMass

    Business Accounting Ethics

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A corporation, owned by one owner, decides to go out of business due to excessive losses. When the stock was originally issued, the owner did not specify that the stock purchased (at a price of $1000) would be considered §1244 stock. Now that the company is being dissolved, the owner realizes that the loss on the stock would be limited to $3,000 per year. Consequently, because the loss would equate to approximately $200,000, the owner desires to change the stock to §1244 stock, thus allowing greater deductions. Can the owner change the type of stock after the fact? If the owner could change the stock, would this be ethical?

    Explain whether or not this is ethical.

    © BrainMass Inc. brainmass.com June 4, 2020, 1:57 am ad1c9bdddf
    https://brainmass.com/business/business-philosophy-and-ethics/business-accounting-ethics-429858

    Solution Preview

    First and foremost, the owner does have the legal right to change the stock after the fact, due to the fact that the stock ...

    $2.19

    ADVERTISEMENT