Citron enters into a Type C restructuring with Ecru. Ecru transfers $800,000 of its voting stock for
Question:
Citron enters into a “Type C” restructuring with Ecru. Ecru transfers $800,000 of its voting stock for Citron’s $1,500,000 (basis $600,000) and $700,000 liabilities.
Citron retains one asset, land, which it distributes to its sole individual shareholder, Electra. The land is valued at $150,000, and its basis is $80,000. Electra’s basis in her Citron stock is $970,000.
Determine the Federal income tax consequences for Citron, Ecru, and Electra, including Ecru’s basis in the assets it receives from Citron. Determine Electra’s basis in the Ecru stock she receives, using spreadsheet software such as Microsoft Excel.
Step by Step Answer:
The transaction meets the 368 requirements for a Type C reorganization Citron recognizes 70000 gain ...View the full answer
South Western Federal Taxation 2020 Corporations, Partnerships, Estates And Trusts
ISBN: 9780357109168
43rd Edition
Authors: William A. Raabe, James C. Young, William H. Hoffman, Annette Nellen, David M. Maloney
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