Alpha Corporation purchases 20% of Theta Corporation stock from Milt on August 10 of the current year.
Question:
a. What is the acquisition date for the Theta stock for Sec. 338 purposes? By what date must Alpha make the Sec. 338 election?
b. If Alpha makes a Sec. 338 election, what is the aggregate deemed sale price for the assets?
c. What is the total basis of the assets following the deemed sale, assuming a 34% corporate tax rate?
d. How does the tax liability attributable to the deemed sale affect the price Alpha should be willing to pay for the Theta stock?
e. What happens to Theta’s tax attributes following the deemed sale?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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