What are the tax consequences of this merger to Target Corporation and its shareholders and Acquiring Corporation
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- What are the tax consequences of this merger to Target Corporation and its shareholders and Acquiring Corporation and its shareholders?
- The stock of Target Corporation is owned equally by four individuals -- Alice, Ben, Cathy, and David and their adjusted basis in the Target stock are $390,000, $870,000, $1,190,000 and $660,000, respectively.Target's assets consist of the following: Cash $200,000; Inventory $2,000,000 (AB $1,400,000); Land $1,800,000 (AB $2,100,000).Pursuant to the laws of the State of Iowa, Target is merged into Acquiring Corporation pursuant to a plan whereby each shareholder of Target, other than David, is to receive solely the stock of Acquiring Corporation and David is to receive $250,000 of Acquiring Corp stock and $750,000 of cash. Acquiring Corporation is a publicly traded company whose assets, net of liabilities, are valued at $800 million.
Related Book For
Federal Taxation 2015 Corporations Partnerships Estates & Trusts
ISBN: 9780133822144
28th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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