From an economic policy perspective, do you think the provisions in Section 351 that allow nontaxable corporate formation are desirable? Why or why not?
Answer to relevant QuestionsWhat are constructive dividends? Do you think constructive dividends are more likely to occur in large publicly traded corporations or small privately held corporations? Why? Why is it so difficult to measure the effects (if any) of taxes on the pretax returns of assets? What is the difference between a firm’s financial accounting asset basis and its tax asset basis? How would you quantify such a difference? Be sure to mention specific accounts in the financial statements and techniques. What are the main tax considerations in the sale of a target’s stock to a purchaser? What are the main tax considerations to a purchaser in the sale of a target’s stock when the target is an S corporation?
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