Brown Corporation operates several trades and businesses. In the current year, Brown discontinues the operation of one of its trades and businesses. Brown is considering distributing to its shareholders either the assets of the discontinued business or the proceeds from the sale of such assets. Considering both of these alternatives, what are the tax issues for Brown Corporation and its shareholders?
Answer to relevant QuestionsExplain the requirements for a redemption to pay death taxes. What are the tax consequences of a redemption to pay death taxes for the share holder and the corporation? For the built-in loss limitation to apply, the property must have been acquired by the corporation as part of a plan whose principal purpose was to recognize a loss on the property by the liquidating corporation. Explain. From the perspective of the parent corporation, contrast the tax consequences of a subsidiary liquidation under the general nonrecognition rules with a subsidiary liquidation that follows a § 338 election. Osprey Corporation stock is owned by Pedro and Pittro, who are unrelated. Pedro owns 50% and Pittro owns 50% of the stock in the corporation. Osprey has the following assets (none of which were acquired in a § 351 or ...The gross estate of Raul, decedent, includes stock in Iris Corporation (E & P of $3 million) valued at $2.5 million. At the time of his death, Raul owned 60% of the Iris stock outstanding, and he had a basis of $420,000 in ...
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