Problem $8-58($LO $8-4)($Algo$)$

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Amy and Brian were investigating the acquisition of a tax accounting business, Bottom Line Incorporated $($BLI$).$ As part of their discussions with the sole shareholder of the corporation, Ernesto Young, they examined the company's tax accounting balance sheet. The relevant information is summarized as follows:

Note: Leave no answer blank. Enter zero if applicable. Negative amounts should be indicated by a minus sign.

$$FMVAdjusted Tax BasisAppreciationCash$ $12,000$$ $12,000$Receivables$19,00019,000$Building$77,00038,50038,500$Land$165,000105,00060,000$Total$ $273,000$$ $174,500$$ $98,500$Payables$ $22,000$$ $22,000$Mortgage$*$Footnote asterisk$87,00087,000$Total$ $109,000$$ $109,000$

$*$Footnote asterisk The mortgage is attached to the building and land.

Ernesto was asking for $$344,000$ for the company. His tax basis in the BLI stock was $$100,000.$ Included in the sales price was an unrecognized customer list valued at $$100,000.$ The unallocated portion of the purchase price $($$$80,000)$ will be recorded as goodwill.

Assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $$344,000.$

Problem $8-58$ Part c $($Algo$)$

c$.$ What are the tax benefits, if any, to Amy and Brian from structuring the acquisition as a stock sale?