Tom Smith owns 100% of Alpha Corporation’s single class of stock, and Alpha owns 100% of Beta Corporation’s single class of stock. Alpha and Beta have filed separate tax returns for a number of years. Neither corporation has any NOL carryovers. Although in recent years Alpha and Beta have been profitable, Beta needs an infusion of additional capital from outside investors. The corporations have received a proposal from an investor, Karla Boroff, to invest $2 million in Beta to enable Beta to expand its operations and to eliminate a current working capital shortage. Karla has imposed one constraint on her capital contribution—that Alpha and Beta become two independent entities. Alpha would continue to be owned entirely by Tom, but Beta would be controlled by the two individuals, Tom and Karla, with each owning 50% of Beta’s stock. What tax strategies can you offer for separating the two companies?