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Mr. Gregory White
Mr. Gregory White, Master's Degree
Category: Essays
Satisfied Customers: 5229
Experience:  M.A., M.S. Education / Educational Administration
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She informs you that she recently entered into a settlement

Customer Question

She informs you that she recently entered into a settlement agreement with her investment advisor. The investment advisor has paid Client A $150,000. The payment is attributable to investment losses caused by the investment advisor’s alleged failure to
follow the asset allocation directions from Client A. Specifically; Client A instructed her advisor to change the investment objective for her account from “all equity” to “current income.” The advisor understood these instructions to mean reallocate her portfolio
from equity to income gradually over time, rather than an immediate sell off and restructuring. Client A claims that her intention was to do an immediate sell off and restructuring. Hence, a dispute arose with respect to the correct interpretation of her instructions
and the decline in market value of the equity position over the length of time it took her advisor to gradually sell (restructure) her equity portfolio to income. Client A says this could have been avoided had the change in asset allocation been implemented
immediately the way she wanted. In the interests of both parties in settling the dispute without admission of fault by either party, the investment advisor agreed to pay Client A $150,000. Client A (the payee) wants to know the following: • Is this settlement
payment taxable for federal income tax purposes? And • If so, what is the character of the payment? Is it a reduction of tax basis of investment assets, ordinary income, or short or long-term capital gain income? In addition, research and address what the
income tax consequences are to the investment advisor (the payor) in making the settlement payment. Is the payment deductible, and if so, what is the character of the deduction? Hint: Recall that income tax consequences in general are symmetrical; meaning
that if one taxpayer for a given transaction has to report income, then the other taxpayer to the transaction generally has a deduction. Prepare a tax research memorandum to answer the questions raised by your client. State any assumptions you make. Your written
memorandum should be no approximately six pages in length. Recall that proper format and content are of equal importance. Refer to the Sample Tax Memorandum for guidance on the proper format. This assignment will be graded using the rubric below.
Submitted: 1 year ago.
Category: Essays
Customer: replied 1 year ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  Mr. Gregory White replied 1 year ago.

Hello, my name is Greg.

Is there any other information you can send to see if I can assist on it this for you? If you have any documents you can upload, you can do so to mediafire.com or box.com and share the link here with us.

If I had a model and could provide that as a model (would have to check files to see if I have one), would that be sufficient or are you seeking a fully written new model document?

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