Circular Club Rodeo Analysis

TAX 650 Milestone One Guidelines and Rubric
In this short paper, you will compute the property disposition
capital gain and taxation of gross income for the client
described in the final project. Based on your
computations and relevant sections of the Internal Revenue
Code, explain the tax consequences on the possible sale or
exchange of the land, including the
impact on cash flow and salary or cash distributions.
Specifically, the following critical elements must be addressed:
A. Calculate the property disposition capital gains and taxation
of gross income.
B. Identify the tax consequences on the sale or exchange of the
land consistent with capital gain rules. Consider the selling
expense, broker’s fees, closing
costs, appraisals, and surveys and the correct schedule form to
complete.
C. Describe the after tax effects on the client’s cash flow based
on the sale of the land. Consider including capital gains tax
rules.
D. Explain whether or not the client and his child should take a
salary or cash distribution according to tax purposes and the
Internal Revenue Code and
Treasury regulations. Consider the type of business and the tax
effect whether it is salary, dividends , or cash withdrawal.
Guidelines for Submission: Your paper must be submitted as a

2–4-page Microsoft Word document with double spacing, 12-
point Times New Roman font, one-
inch margins, and at least three sources cited in APA format.
Instructor Feedback: This activity uses an integrated rubric in
Blackboard. Students can view instructor feedback in the Grade
Center. For more in formation,
review these instructions.
Critical Elements Proficient (100%) Needs Improvement (75%)
Not Evident (0%) Value
Tax Computations Accuratel y computes the property
di s pos i tion capital gai n and
taxati on of gros s i ncome
Computes the property di s pos ition
capi tal gai n and taxati on of gros s
i ncome, but computati on i s
i naccurate or i ncompl ete
Does not compute the property
di s pos i tion capital ga i n and
taxati on of gros s i ncome
40
Tax Consequences: Salary
or Cash Distribution
Expl ai ns whether the cl i ent and hi s
chi l d s houl d take a s al ary or cas h
di s tri buti on accordi ng to tax

purpos es and the Internal
Revenue Code and Treas ury
Regul ati ons
Expl ai ns whether the cl i ent and hi s
chi l d s houl d take a s al ary or cas h
di s tri buti on but detai l s are curs ory
or not cons i s tent wi th tax
purpos es and the Internal
regul ati ons
Does not expl ai n whether the
cl i ent and hi s chi l d s houl d take a
s al ary or cas h di stributi on
40
Articulation of Response Submi s s i on has no major errors
rel ated to ci tati ons , grammar,
s pel l i ng, s yntax, or organi zati on
Submi s s i on has major errors
that negati vel y i mpact readabi l ity
and arti cul ation of mai n i deas
Submi s s i on has criti cal errors

that prevent unders tandi ng of
i deas
20
Earned Total 100%
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Scenario: Shelley Jones has just been elected as president of the
Circular Club of Auburn, Kansas, and she has been asked to
suggest a new fundraising activity for the club. After a
considerable amount of research, Shelley proposed the Circular
Club sponsor a professional rodeo. In her presentation to the
club, Shelley recommends the fundraiser become an annual
activity with the following goals:
· Continue to grow each year
· Give back to the community
· Provide the club a presence in the community
Shelley's goal in the first year is to have an activity that would
become an "annual community event" and would break even the
first year and raise $5,000 the following year. In addition, based
on the experience of other communities, Shelley believed a
rodeo could grow in popularity so the club would eventually
earn an average of $20,000 annually.
A rodeo committee was formed. Shelley contacted the world's
oldest and largest rodeo-sanctioning agency to apply to sponsor
a professional rodeo. The sanctioning agency requires a rodeo
to consist of the following five events: Bareback Riding,
Bronco Riding, Steer Wrestling, Bull Riding, and Calf Roping,
Team Roping and Women's Barrels. Prize money in the amount
of $3,000 would be paid to winners in each of the seven events.

Members of the rodeo committee contracted with RJ Cattle
Company, a livestock contractor on the rodeo circuit, to provide
bucking stock, fencing, and chutes. Realizing costs associated
with the rodeo were tremendous and ticket sales would probably
not be sufficient to cover the costs, the rodeo committee sent
letters to local businesses soliciting contributions in exchange
for various sponsorships. Exhibiting Sponsorships are $1,000 to
exhibit products or services, while Major Sponsorships are
$600, and Chute Sponsorships are $500 to have the name of the
sponsor's business on one of the six bucking chutes. For a
contribution of $100, individual sponsors will be included in a
Friends of Rodeo list found in the rodeo programs.
A local youth group will be contacted to provide concessions to
the public and divide the profits with the Circular Club. The
Auburn Circular Club Pro Rodeo Roundup will be held on June
1, 2, and 3. The cost of an adult ticket is set at $8 in advance or
$10 at the gate; the cost of a ticket for a child 12 or younger is
set at $6 in advance or $8 at the gate. Tickets are not date-
specific. Rather, one ticket will admit an individual to one
performance of his or her choice-- Friday, Saturday, or Sunday.
The rodeo committee is able to secure a location through the
county supervisors' board at a nominal cost to the Circular
Club. The arrangement allows for the use of the county fair
grounds and arena for a one-week period. Several months prior
to the rodeo, members of the rodeo committee were notified the
bleachers at the arena would hold 2,500 patrons. On Saturday
night, paid attendance was 1,663, but all seats were filled due to
poor gate controls. Attendance was 898 Friday and 769 on
Sunday.
The following revenue and expense figures relate to the first
year of the rodeo.
Receipts
Contributions from sponsors $22,000
Receipts from ticket sales $28,971
Share of concession profits $1,513
Sale of programs $600

Total receipts $53,084
Expenses
Livestock contractor $26,000
Prize money $21,000
Contestant hospitality $3,341*
Sponsor signs for arena $1,900
Insurance $1,800
Ticket printing $1,050
Sanctioning fees $925
Entertainment $859
Judging fees $750
Port-a-potties $716
Rent $600
Hay for horses $538
Programs $500
Western hats to first 500 children $450
Hotel rooms for stock contractor $325
Utilities $300
Sand for arena $251
Miscellaneous fixed costs $105
Total expenses $61,410
Net loss $ (8,326)
*The club contracted with a local caterer to provide a tent and
food for the contestants. The cost of the food was contingent on
the number of contestants each evening. Information concerning
the number of contestants and the costs incurred are as follows:
ContestantsTotal Cost
Friday 68 $998
Saturday 96 $1,243
Sunday 83 $1,100
$3,341
On Wednesday after the rodeo, members of the rodeo committee
met to discuss and critique the rodeo. Jonathan Edmunds, CPA
and President of the Circular Club, commented that the club did
not lose money. Rather, Jonathan said, "The club made an
investment in the rodeo." The rodeo committee has requested

an analysis of the rodeos performance and evaluation of the
CPA's review.
Create a minimum 10-slide presentation, including detailed
speaker notes, as the committee's consultation team and respond
to the following:
· What did Jonathan Edmunds mean when he said the club had
made an investment in the rodeo? Is his comment consistent
with Shelley's idea that the club should have a fundraiser that
would:
· Continue to get better each year.
· Give back to the community.
· Provide the club a presence in the community? Why or why
not?
· Shelley, Jonathan, and Adrian Stein, the Fundraising
Chairperson, are beginning to make plans for next year's rodeo.
Shelley believes by negotiating with local feed stores, inn-
keepers, and other business owners, costs can be cut
dramatically. Jonathan agrees. After carefully analyzing costs,
Jonathan has estimated the fixed expenses can be pared to
approximately $51,000. In addition, Jonathan estimates variable
costs are 4% of total gross receipts. After talking with business
owners who attended the rodeo, Adrian is confident the funds
solicited from sponsors will increase. Adrian is comfortable in
budgeting revenue from sponsors at $25,600. The local youth
group is unwilling to provide concessions to the audience unless
they receive all of the profits. Not having the personnel to staff
the concession booth, members of the Circular Club reluctantly
agree to let the youth group have 100% of the profits from the
concessions. In addition, members of the rodeo committee,
recognizing the net income from programs was only $100,
decide not to sell rodeo programs next year.
· Compute the break-even point in dollars of ticket sales
assuming Adrian and Jonathan are correct in their assumptions.
· Shelley has just learned you are calculating the break-even
point in dollars of ticket sales. She is still convinced the Club
can make a profit using the assumptions above (second bullet

point above).
· Calculate the dollars of ticket sales needed to earn a target
profit of $6,000.
· Calculate the dollars of ticket sales needed to earn a target
profit of $12,000.
· Are the facilities at the fairgrounds adequate to handle crowds
needed to generate ticket revenues calculated above (third bullet
point above) to earn a $6,000 profit? Show calculations to
support your answers.
· A few members in the Circular Club do not want to continue
with the annual rodeo. However, Shelley is insistent the Club
must continue to conduct the rodeo as an annual fundraiser.
Shelley argues she has spent hundreds of dollars on western
boots, hats, and other items of clothing to wear to the rodeo.
Are the expenses related to Shelley's purchases of rodeo
clothing relevant costs? Why or why not?
· Rather than hire the local catering company to cater the
Contestant Hospitality Tent, members of the Circular Club are
considering asking Shady's Bar-B-Q to cater the event in
exchange for a $600 Major Sponsor spot. In addition, The Fun
Shop, a local party supply business, will be asked to donate a
tent to use for the event. The Fun Shop will also be given a
$600 Major Sponsor spot. Several members of the Club are
opposed to this consideration, arguing that the two Major
Sponsor spots will take away from the money to be earned
through other sponsors. Adrian Stein has explained to the
members the Major Sponsor signs for the arena cost only $48
each. In addition, there is more than enough room to display
two additional sponsor signs. What would you encourage the
Club to do concerning the Contestant Hospitality Tent? Would
your answer be different if the arena were limited in the number
of additional signs that could be displayed? What kind of cost
would you consider in this situation that would not be found on
a financial statement?
· Assume you are elected chair of the rodeo committee for next
year. What steps would you suggest the committee take to make

the rodeo profitable?
Show your work in Microsoft® Word or Excel®.
Complete calculations/computations using Microsoft® Word or
Excel®.
Format the assignment consistent with APA guidelines.
TAX 650 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of a
memorandum with appendix (7–10 pages).
As an associate working in a privately held enterprise or
working with privately held clients, it is impera tive to be able
to advise clients on the tax implications of
their financial investments. The ability to model the tax
consequences of transactions and do cost benefit analysis is
crucia l.
For your final project, you will model the role of an associate
working in a private consulting firm. You will demonstrate your
ability to advise clients on whether
they should operate as a sole proprietor, a partnership, an S
corporation, or a C corporation. Additionally, using your tax
research skills and understanding of
federal income taxation, you will have the opportunity to
evaluate tax consequences from sales and distributions for their
compliance with the Internal Revenue
Code and Treasury regulations.
The project is divided into four milestones, which will be

submitted at various points throughout the course to scaffold
learning and ensure quality final
submissions. These milestones will be submitted in Modules
Three, F ive, Seven, and Eight. The final product will be
submitted in Module Nine.
In this assignment, you will demonstrate your mastery of the
following course outcomes:
e business tax entity based on the
analysis of a tax situation for achieving favorable economic
impact on the client’s taxable
income
taxable income on individual tax returns and reflect versatility
of thought, resulting in the best
economic solution for the individual taxpayer
moral reasoning in de termining when business transactions may
be reported for income tax
purposes
sess the economic impact on taxable income for the
business tax entity in relation to Internal Revenue Code and
Treasury regulations and the optimum
desired outcomes for the client
distributions of property for their compliance with IRS Circular
230, Internal Revenue Code, and
the American Institute for Certified Public Accountants and for
advising the client

Prompt
You are currently working at a mid-sized certified public
accounting firm. Your client is Bob Jones. Bob, age 60 and
single, has recently retired from IBM. He has
$690,000 available in his 401(k) fund and he is thinking of
using that money to open a used car busi ness that will be
located at 210 Ocean V iew Drive in
Pensacola, Florida. Bob has estimated that the business might
make $300,000 in taxable income.
Bob’s personal wealth including investments in land, stocks,
and bonds is about $14,000,000. He reported a n interest income
of $20,000 and dividend income of
$6,000 last year. The $14,000,000 includes land worth
$9,000,000 that Bob bought in 1966 for $450,000.
Bob has hired your firm for professional advice regarding
whether he should operate as a sole proprietor, a partnership, an
S corporation, or a C corporation. He
is also considering transferring a possible 40% interest in his
new business to his daughter Mandy, age 23 and single.
Prepare a memorandum to the client, recommending a type of
business entity, including an appendix of supporting IRS tax
schedules and forms.
Specifically, the following critical elements must be addressed:
I. Memorandum
A. Recommend a type of business entity for the client to

consider based on your tax research. Consider justifyin g your
recommendation using the
code and regulations that relate to the business entity.
B. Differentiate between accrual accounting and cash basis.
Based on the type of business and the client’s accounting
system, what is the imp act
when revenue is recognized?
C. Based on the decision of accrual vs. cash basis, describe
when revenue would be recognized on the sale of inventory, and
how the accrual
reporting differs from cash basis.
D. Determine the economic impact on the client’s financial
situation. Based on your decision, determine the potential tax
liability, keeping in mind
appropriate Internal Revenue Code and Treasury regulations.
E. Identify the tax consequences on the sale or exchange of the
land consistent with capital gain rules. Consider the selling
expense, broker’s fees,
closing costs, appraisals, and surveys and the correct schedule
form to complete.
F. Justify whether or not the client should choose a business
entity that has limited liability protection. Be sure to include
possible future liability
issues based on the potential economic impact and appropriate
Internal Revenue Code and Treasury regulations.
G. Describe the tax effect on the recommended business entity
and the impact it will have on the client’s personal tax return.
Consider addressing
how the business entity affects the completion of the 1040 tax

form.
II. Conclusion
A. Evaluate the economic impact on the client’s personal
returns based on the recommended entity. Justify why the client
would not choose the
other business entities by informing the client of the
differences.
B. Justify your recommendation regarding the client’s daughter
having an ownership interest. Provide details supporting the
recommendation
taking into consideration the jargon and mechanics of the
transaction.
C. Summarize, using moral reasoning, cash or accrual basis
accounting systems in relation to the selected business entity.
Consider how the
accounting system impacts revenue recognition, consistent with
Internal Revenue Code and Treasury regulations.
D. Describe the after tax effects on the client’s cash flow based
on the sale of the land that is needed to provide the funds
necessary to start the
business. Consider including capital gains tax rules.
E. Explain whether or not the client and his child should take a
salary or cash distribution according to tax purposes and
Treasury regulations. Consider the type of business and the tax
effect whether it is salary, dividends , or cash withdrawal.

III. Appendix
Based on your recommendation to the client regarding
proprietorship, taxable income, and sale of land, complete the
appropria te tax schedules and
forms described below.
A. Prepare the appropriate page of Form 1040 and include the
sale of the client’s land on the appropriate tax schedule and
form for the
recommended business entity. Be certain to complete each tax
schedule and form accurately and complete ly.
B. Prepare the appropriate schedule and tax forms to reflect
taxable income based on your calculations and the disposition
of asset. Be certain to
complete each tax schedule and form accurately and completely.
C. Illustrate how creative problem solving and versatility of
thought impact professional advice that you intended to result in
the best economic
solutions for the client. Consider providing real-world examples
to support your claims.
Milestones
Milestone One: Gross Income and Capital Gains
In Module Three, you will submit a draft of the gross income
and capital gains, analyzing the following critical elements: I.
Memorandum, section E, and II.
Conclusion, sections D and E. You must compute the property
disposition capital gain and taxation of gross income. In
completing this assignment, consider the
tax effect of salary dividends or cash withdrawal in accordance

with Internal Revenue Code and Treasury regulations. This
assignment will be submitted as a
Word document. This milestone is graded with the Milestone
One Rubric.
Milestone Two: Revenue Recognition and Accounting Methods
In Module F ive, you will submit a draft of the revenue
recognition and accounting methods, summarizing the following
critical elements: I. Memorandum,
sections B, C, and D, and II. Conclusion, section C. You will
determine revenue recognition and the economic impact of the
client’s financial situation. Based on
your decision, determine the potential tax liability, keeping in
mind appropriate Internal Revenue Code and Treasury
regulations. This assignment will be
submitted as a Word document. This milestone is graded with
the Milestone Two Rubric.
Milestone Three: Choice of Business Entity
In Module Seven, you will submit a draft of the choice of
business entity, analyzing the following critical elements: I.
Memorandum, sections A, F, and G, and II.
Conclusion, sections A and B. The short paper will
communicate tax aspects of business entities to the client. This
assignment will be submitted as a Word
document. This milestone is graded with the Milestone Three
Rubric.
Milestone Four: Tax Forms
In Module Eight, you will submit IRS draft tax forms, analyzing
all of the critical elements in III. Appendix, sections A, B, and
C. Based on your research, the tax
forms and schedules will support your recommendation to the
client. This assignment will be submitted as completed tax
forms, which are provided to you in
your textbook resource CD or on the IRS website. This

milestone is graded with the Milestone Four Rubric.
F inal Submission: Memorandum With Appendix
In Module Nine, you will submit a memorandum with an
appendix to the client and all IRS tax forms and schedules
necessary to support your advice . It should be
a complete, polished artifact containing all of the critical
elements of the final product. It should reflect the incorporation
of feedback gained throughout the
course. This submission is graded with the F inal Product
Rubric.
Deliverables
Milestone Deliverable Module Due Grading
One Gross Income and Capital Gains Three Graded separately;
Milestone One Rubric
Two Revenue Recognition and Accounting
Methods
F ive Graded separately; Milestone Two Rubric
Three Choice of Business Entity Seven Graded separately;
Milestone Three Rubric
Four Tax Forms Eight Graded separately; Milestone Four
Rubric
F inal Submission: Memorandum With

Appendix
Nine Graded separately; F inal Product Rubric
Final Product Rubric
Guidelines for Submission: Your memorandum must be 7 to 10
pages in length (plus a cover page and references) and must be
written in APA format. Use double
spacing, 12-point Times New Roman font, and one -inch
margins. Your memorandum must include an appendix
containing electronic versions of the appropriate
IRS tax schedules and forms. Include at least three references
cited in APA format.
Instructor Feedback: This activity uses an integrated rubric in
Blackboard. Students can view instructor feedback in the Grade
Center. For more informati on,
review these instructions.
Critical Elements Exemplary Proficient Needs Improvement Not
Evident Value
Memo: Business
Entity
Meets “Profi ci ent” cri teri a and
detai l s are jus ti fi ed us i ng
appropri ate Internal Revenue
Code and Treas ury regul ati ons
rel evant to recommended
bus i nes s enti ty
(100%)

Recommends a type of bus i nes s
enti ty for the cl i ent to cons i der
that i s bas ed on tax res earch
(90%)
Recommends a type of bus i nes s
enti ty but ei ther the ci ted
Treas ury regul ati ons are
i naccurate or detai l s are curs ory
(70%)
Does not recommend a type of
bus i nes s enti ty
(0%)
6.4
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ic_feedback_instructions_student.pdf
Memo: Accrual
Accounting vs. Cash
Basis
provi des a ful l des cri pti on of

whi ch enti ti es requi re accrual
and when i t i s opti onal
(100%)
Di fferenti ates between accrual
accounti ng and cas h bas i s and
i denti fi es the i mpact of the
revenue
(90%)
Di fferenti ates between accrual
accounti ng and cas h bas i s and
i denti fi es the i mpact of the
revenue, but the detai l s are
i naccurate or curs ory
(70%)
Does not di fferenti ate between
accrual accounti ng and cas h
bas i s or does not i denti fy the
i mpact of the revenue
(0%)
6.4
Memo: Revenue
Recognized on the
Sale

des cri bes the i ns tal lment
method of reporti ng revenue
(100%)
Des cri bes when revenue woul d
be recogni zed and how the
reporti ng di ffers for accrual
accounti ng vs . cas h bas i s
(90%)
Des cri bes when revenue woul d
be recogni zed and how the
reporti ng di ffers but detai l s are
(70%)
Does not des cri be when
revenue woul d be recogni zed or
how the reporti ng di ffers
(0%)
6.4
Memo: Economic
Impact
addres s es payrol l tax i s sues and
s el f-empl oyment tax
(100%)

Determi nes the economi c
i mpact on the cl i ent’s fi nanci al
s i tuati on and potenti al tax
l i abi lity, and determi nati ons are
cons i s tent wi th Internal
regul ati ons
(90%)
Determi nes the economi c
i mpact on the fi nanci al s ituati on
and potenti al tax l i abi lity but
ei ther the referenced Internal
regul ati ons are i naccurate or
detai l s are curs ory
(70%)
Does not determi ne the
economi c i mpact on the
fi nanci al s ituation and potenti al
tax l i ability
(0%)
6.4
Memo: Tax
Consequences

comprehens i vel y addres s es al l
expens es i ncl udi ng how bes t to
report on the s chedul e
(100%)
Identi fi es the tax cons equences
on the s al e or exchange of the
l and cons i s tent wi th capi tal
gai ns rul es
(90%)
Identi fi es tax cons equences but
detai l s are ei ther i ncons i stent
wi th capi tal gai ns rul es or
curs ory
(70%)
Does not i denti fy tax
cons equences
(0%)
6.4
Memo: Limited
Liability Protection

i ncl udes i nformati on about
l i mi ted l i abi lity compani es
(100%)
Jus ti fi es whether or not the
cl i ent s houl d choos e a bus i nes s
enti ty that has l i mi ted l i ability
protecti on and i ncl udes pos s i ble
future l i abil ity i ss ues cons is tent
wi th Internal Revenue Code and
Treas ury regul ati ons
(90%)
Jus ti fi es whether or not to
choos e a bus i nes s enti ty that
has l i mi ted l i ability protecti on
but does not i ncl ude pos s i ble
future l i abil ity i ss ues, pos s ible
future l i abil ity i ss ues are not
cons i s tent wi th Internal
regul ati ons , or detai l s are ei ther
(70%)
Does not jus ti fy whether or not
to choos e a bus i nes s enti ty that
has l i mi ted l i ability protecti on
(0%)

6.4
Memo: Tax Effect
addres s es the cl i ent’s after tax
fl ow
(100%)
Des cri bes the tax effect on the
recommended bus i nes s enti ty
and the i mpact on the cl i ent’s
pers onal tax return
(90%)
Des cri bes the tax effect on the
recommended bus i nes s enti ty
and the i mpact on the cl i ent’s
pers onal tax return, but detai l s
are i rrel evant or curs ory
(70%)
Does not des cri be the tax effect
on the recommended bus i nes s
enti ty and the i mpact on the
cl i ent’s pers onal tax return
(0%)

6.4
Conclusion:
Economic Impact:
Personal Returns
s hows keen i ns i ght i nto the
advantages and di s advantages
of choos i ng appropri ate
bus i nes s enti ti es
(100%)
Eval uates the economi c i mpact
on the cl i ent’s pers onal returns
bas ed on the recommended
enti ty and jus ti fi es res pons e by
i ncl udi ng i nformati on about the
other enti ti es
(90%)
Eval uates the economi c i mpact
of cl i ent’s pers onal returns but
does not provi de jus ti fi cati on or
detai l s l ack rel evance or are
curs ory
(70%)

Does not eval uate the economi c
i mpact of cl i ent’s pers onal
returns
(0%)
6.4
Conclusion:
Ownership Interest
us es appropri ate voi ce for the
audi ence
(100%)
Jus ti fi es recommendati on
regardi ng the cl i ent’s daughter
havi ng an owners hi p i nteres t
us i ng detai l s s upporti ng the
recommendati on
(90%)
Jus ti fi es recommendati on
regardi ng cl i ent’s daughter
havi ng an owners hi p i nteres t
but detai l s ei ther l ack rel evance
or are curs ory
(70%)
Does not jus ti fy the
recommendati on regardi ng

cl i ent’s daughter havi ng
owners hi p i nteres t
(0%)
6.4
Conclusion: Cash or
Accrual Basis
Accounting System
i denti fi es the i mpact on revenue
recogni ti on cons i s tent wi th
(100%)
Summari zes , us i ng moral
reas oni ng, cas h or accrual bas is
accounti ng s ys tems i n rel ati on
to the s el ected bus i nes s enti ty
cons i s tent wi th appropri ate
(90%)
Summari zes cas h or accrual
bas i s accounting s ys tems i n

rel ati on to the s el ected bus i ness
enti ty, but detai l s ei ther l ack
moral reas oni ng or are curs ory
(70%)
Does not s ummari ze cas h or
accrual basis accounti ng
s ys tems i n rel ati on to the
s el ected bus i nes s enti ty
(0%)
6.4
Conclusion: Tax
Effects on Cash Flow
ci tes capi tal gai ns tax rul es
rel ati ng to gai ns and l os s es
(100%)
Des cri bes the after tax effects
on the cl i ent’s cas h fl ow bas ed
on the s al e of the l and that i s
needed to s tart the bus i nes s
(90%)
Des cri bes the after tax effects
on the cl i ent’s cas h fl ow that are
needed to s tart the bus i nes s but

detai l s are ei ther i naccurate or
curs ory
(70%)
Does not des cri be the after tax
effects on the cl i ent’s cas h fl ow
that are needed to s tart the
bus i nes s
(0%)
6.4
Conclusion: Salary
or Cash Distribution
i ncl udes the tax effect on s al ary,
di vi dends , or cas h wi thdrawal
(100%)
Expl ai ns whether or not the
s al ary or cas h di stributi on
accordi ng to tax purpos es and
(90%)

Expl ai ns whether or not the
s al ary or cas h di stributi on but
detai l s are curs ory or not
cons i s tent wi th tax purpos es
and Internal Revenue code and
(70%)
Does not expl ai n whether or not
the cl i ent and hi s chi l d s houl d
take a s al ary or cas h di stributi on
(0%)
6.4
Appendix: Form
1040
Prepares the appropri ate page
of Form 1040 accuratel y and
compl etel y, i ncl uding the s al e of
the cl i ent’s l and on the
appropri ate tax form and
s chedul e
(100%)
Prepares the appropri ate page
of Form 1040 on the

s chedul e, but detai l s are ei ther
i ncompl ete or i naccurate
(70%)
Does not compl ete the
appropri ate page of Form 1040
and does not i ncl ude the s al e of
the cl i ent’s l and on the
s chedul e
(0%)
6.4
Appendix: Schedule
and Tax Form
Prepares the appropri ate
s chedul e and tax form
accuratel y and compl etel y,
refl ecti ng taxabl e i ncome bas ed
on cal cul ati ons and the
di s pos i tion of as s et
(100%)
Prepares the appropri ate
s chedul e and tax form refl ecti ng
taxabl e i ncome but detai l s are

i ncompl ete or i naccurate
(70%)
Does not prepare the
appropri ate tax form refl ecti ng
taxabl e i ncome
(0%)
6.4
Appendix:
Professional Advice
Meets “Profi ci ent” and provi des
real -worl d exampl es to s upport
cl ai ms
(100%)
Il l us trates how creati ve probl em
s ol vi ng and vers ati l ity of
thought i mpacts profes s i onal
advi ce i ntended to res ul t i n the
bes t economi c s ol uti ons for the
cl i ent
(90%)
Il l us trates how creati ve probl em
s ol vi ng and vers ati l ity of
thought i mpacts profes s i onal

bes t economi c s ol uti ons for the
cl i ent but detai l s are i rrel evant
or curs ory
(70%)
Does not i l l ustrate how creati ve
probl em s ol vi ng and vers ati l ity
of thought i mpacts profes s i onal
bes t economi c s ol uti on for the
cl i ent
(0%)
6.4
Articulation of
Response
Submi s s i on i s free of errors
s pel l i ng, s yntax, and
organi zati on and i s pres ented i n
a profes s i onal and eas y-to-read
format
(100%)
Submi s s i on has no major errors

(90%)
Submi s s i on has major errors
s pel l i ng, s yntax, or orga ni zati on
that negati vel y i mpact
readabi l ity and arti culation of
mai n i deas
(70%)
Submi s s i on has criti cal errors
that prevent unders tandi ng of
i deas
(0%)
4
Earned Total 100%

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