TO: ABC Mining Company FROM: T DATE: April 14, 2012 RE: Tax consequences and other risk factors associated with mining operations
I. FACTS ABC Mining Company, Inc. is a publically traded, large domestic mining company with over 500 plants in the United States. ABC owns a tract of land in California upon which it has conducted a strip mining operation for coal. An unrelated party owns a tract of land adjacent to the tract of land in California, which is owned by ABC. This land is worth $5 million. The mine is located near an area that is rapidly growing and is becoming more valuable due to the relocation of several high-tech companies. Housing developers are anxious to acquire tracts of land in the area to either build new…show more content… Treas. Reg. § 1.011-1 and Treas. Reg. § 1.012-1, giving detailed guidelines for calculating the basis in specific scenarios, further clarify the definitions found in IRC § 1011 and IRC § 1012. Treas. Reg. § 1.1031(a)-1 states the term “like-kind” refers to the nature and character of two properties rather than their quality. If two properties are of the same nature, they are considered to be like-kind, regardless of their respective qualities. To illustrate this point, Treas. Reg. § 1.1031(a)-1 gives as an example the exchange of two trucks. Although the trucks are in different conditions, they are of the same class and are therefore considered to be like kind. c. Case Law In Peabody Natural Resources Company v. Comm'r, T.C. Memo. 2006-126, the court held that the tax payer, who exchanged a gold mine for a coal mine, was correct to consider the two properties to be like kind and defer any gains from the sale of the gold mine. The court held the fact that different minerals were mined from each property did not cause the properties fall into different categories. Rather the overall purpose of either property, being in this case the extraction of minerals from the earth, dictated the characteristic of the property. As both properties shared the same purpose, the court ruled that, for purposes of an exchange under IRC § 1031, both mines would be considered to be of like kind and therefore eligible to be utilized in a like kind exchange, therefore
University of New South Wales School of Mining Engineering Prepared for Dr Serkan Saydam Mine 8150 Mine Design and Feasability Major Assignment Prepared by David G Rolph 3309524 Thursday, 8 September 2011 [pic] Summary Huntley and Avondale Collieries are existing underground mines in the Illawarra coal fields of New South Wales. Both mines are on care and maintenance at present but with an improved financial outlook, the existing…
DATE: 04/28/2012 TO: Dr. Gordon, Gus. FROM: Angelica Mendiola, Brittany Shepherd, Kiana Willis, and Terri Smith SUBJECT: SEWMEX: Short-Term Profit Planning in an International Setting SEWMEX is a newly formed sewing factory located in Mexico. SEWMEX, owned by an American company, is incorporated in Mexico as a Mexican company. By contract, the American parent company, SEW Inc. purchases all of SEWMEX’s output. SEW provides all raw materials to SEWMEX. The president of SEW is having suspicions…
company. This means that local manufacturing of the Camry, Camry Hybrid and Aurion vehicles, as well as the production of four cylinder engines, will end by 2017. Toyota said in a statement: “The decision was not based on any single factor. The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base. “Together with one of…
effect of size, risk, and timing of cash flows. 4. What is the basic goal of a business? The primary financial goal of the business firm is to maximize the wealth of the firm's owners. Wealth, in turn, refers to value. If a group of people owns a business firm, the contribution that firm makes to that group's wealth is determined by the market value of that firm. 5 5. List and explain the three financial factors that influence the value of a business. The three factors that affect the…
four aspects of the region: (1) the institutional context, (2) the macroeconomic environment, (3) the consumer profile, and (4) the natural resource endowments. We summarize firms’ strategic choices that result from this context and analyze their consequences for new business creation, incumbents’ survival and growth, and sources of competitive advantages. We conclude by outlining a management research agenda. L atin America is a paradoxical region. The land is endowed with abundant natural resources…
company was hemorrhaging losses of some $27 billion.1 Still, the corporate sector has no monopoly on greed. Consider EduCap Inc., a multibillion-dollar student loan charity. According to Internal Revenue Service records, the organization abused its tax-exempt status by charging excessive interest on loans and by providing millions in compensation and lavish perks to its CEO and her husband, including use of the organization’s $31 million private jet for family and friends.2 Unsurprisingly, these…
Finally, most recently, MGM China Ltd received formal government approval to build its second property in Macau (http://en.wikipedia.org/wiki/MGM_Resorts_International). Environmental Analysis When performing an environmental analysis, the first factor that comes into play is the current economic condition. With the present economic condition in the United States, travel is more of a luxury than ever. There has been a decline in the travel industry simply because people are out of jobs or just…
circumstance, the NPV is $844 million in 10 years lifecycle. The IRR is 64% and BCR is 1.88 with 8.19% discount rate consideration. It is definitely worthy to invest. There would be three main risks existing that are technology risk, marketing risk and the interactions between above two risks. These risks may result in serious impacts to whole enterprise development therefore some effective approaches are recommended to be applied in advance in order to maintain the enterprise flourish. Besides…
UNIVERSITY OF CAPE COAST SCHOOL OF BUSINESS DEVELOPING AN EFFECTIVE AND EFFICIENT TAX SYSTEM IN A DEVELOPING ECONOMY - A CASE STUDY OF GHANA A PROJECT WORK PRESENTED TO THE DEPARTMENT OF ACCOUNTING AND FINANCE, SCHOOL OF BUSINESS, UNIVERSITY OF CAPE COAST IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR AWARD OF A BACHELOR OF COMMERCE DEGREE. JUNE 2005 MEMBERS OF THE PROJECT TEAM NAME SIGNATURE NUMBER…
CONTENTS: CASE STUDIES CASE STUDY 1 Midsouth Chamber of Commerce (A): The Role of the Operating Manager in Information Systems CASE STUDY I-1 IMT Custom Machine Company, Inc.: Selection of an Information Technology Platform CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier CASE STUDY I-3 The VoIP Adoption at Butler University CASE STUDY I-4 Supporting Mobile Health Clinics: The Children’s Health Fund of New York City CASE STUDY I-5…