Zeta Corporation is interested in acquiring Tau Corporation through a "Type A" reorganization on January 2 of the current year. Zeta is valued at $50 million and generates taxable income of $5 million per year, whereas Tau is valued at $7 million and holds a $1.47 million NOL with nine years remaining in its carryover period. If Zeta earns a 7% after-tax rate of return and the Federal long-term tax exempt rate is 3%, what value should Zeta place on Tau's NOL?
Answer to relevant QuestionsOn December 31, 2014, Alpha Corporation, valued at $10 million, acquired BetaCo when BetaCo was valued at $5 million. BetaCo holds a capital loss carryforward of $220,000 and excess business credits of $435,000. At the end ...What is the difference between a split-up, a split-off, and a spin-off? How do these differ from an acquisitive "Type D" reorganization? You are making a presentation to the board of directors of HugeCo about the merits of acquiring Bitty, Ltd., an important supplier. One board member, knowing that you are a tax specialist, asks you to list some of the nontax ...Mini Corporation brought a $7 million NOL carryforward into the Mucho Group of corporations that elected to file on a consolidated basis as of the beginning of this year. Combined results for the year generated $15 million ...Parent and Child Corporations have filed on a consolidated basis since the mid-1970s. The group reports the following amounts for the current tax year. What is the Parent group’s net operating loss for the year that is ...
Post your question