question regarding corporate and tax law Forum

[historybuff]

How much math is involved in finance for lawyers and tax law, and how complex?

[robotclubmember]

little and not very

[BeautifulSW]

Business arithmetic. But even that level of basic math seems to be beyond the abilities of a LOT of lawyers. Some accounting background is helpful.

[evilxs]

The math is almost always add, subtract, multiply, divide.

This is the absolute hardest math the professor had our tax class do:

Alimony Recapture (testing for hidden property settlements)

Step 1: Calculate Excess Payment for 2nd Post Separation Year (PSY)
$40,000 Alimony PSY 2 – ($5,000 Alimony PSY 3 + $15,000)
= $20,000 Excess Payment made in the 2nd post-separation year.

Step 2: Calculate Excess Payment for 1st Post Separation Year (PSY)
$55,000 Alimony PSY 1 – [{($40,000 Alimony PSY 2 - $20,000 Excess Payment 2nd PSY) +
$5,000 Alimony PSY 3 / 2} + $15,000]
= $27,500 Excess Payment made in the 1st post separation year.
The excess payment = $47,500.
It is included in Alma’s gross income and is deductable by Joe above the line in the 3rd post separation year. §71(f)(1)(A), (B).

No complex calculus, nothing hard. Just add, subtract, multiply, divide. You can do this.

[Rotor]

Took a class on Corp Finance last term. We got to do lots of higher order math like exponents (e.g., compounding interest) and quite a bit of Stats (e.g., regression analysis for insider trading event studies). Almost all using Excel so pretty straightforward if you've used it before.

It was much more like a BSchool class. Certainly could be easily avoided and is not necessary for being a corp atty but it's out there for those who want it.

[historybuff]

Interesting, how about the actual practice? besides reading financial statements is the lawyer expected to do much concerning the financing of a deal. Has anyone taken mergers & acquisitions, transactional law or banking law and regulations?