In 2022, your client, Clear Corporation, changed from the cash to the accrual method of accounting for
Question:
In 2022, your client, Clear Corporation, changed from the cash to the accrual method of accounting for its radio stations. The company had a positive § 481 adjustment of $2,400,000 as a result of the change and began amortizing the adjustment in 2022.
In 2023, Clear received an offer to purchase the assets of the radio station business (this would be considered a sale of a trade or business under § 1060). If the offer is accepted, Clear plans to use the proceeds to purchase a satellite television business. Clear has asked you to explain the consequences of the sale of the radio station operation on the amortization of the § 481 adjustment.
Step by Step Answer:
South Western Federal Taxation 2023 Comprehensive Volume
ISBN: 9780357719688
46th Edition
Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young