Questions from Federal Taxation

Q: Bailey Corporation owns a number of automotive parts shops. Bill Smith

Bailey Corporation owns a number of automotive parts shops. Bill Smith owns an automotive parts shop that has been in existence for 40 years and has competed with one of Bailey’s bra...

Q: Sid Kess, a long-time tax client of yours,

Sid Kess, a long-time tax client of yours, has decided to acquire the snow blower manufacturing firm owned by Richard Smith, one of his closest friends. Richard has a $200,000 adjusted basis in his Ri...

Q: How does the IRS interpret the continuity of business enterprise requirement for

How does the IRS interpret the continuity of business enterprise requirement for a Type A reorganization?

Q: Some acquisitive transactions may be characterized as either a Type C or

Some acquisitive transactions may be characterized as either a Type C or a Type D reorganization. Which reorganization provision controls if the two types overlap?

Q: Does the receipt of a favorable advance ruling provide the taxpayer with

Does the receipt of a favorable advance ruling provide the taxpayer with a guarantee that the IRS will follow the ruling if it audits the completed transaction?

Q: From the standpoint of the target corporation shareholders, what is the

From the standpoint of the target corporation shareholders, what is the advantage of a taxable stock acquisition by a purchaser corporation compared to the purchaser’s acquiring all the target’s asset...

Q: What tax advantages exist for a corporate buyer when it acquires the

What tax advantages exist for a corporate buyer when it acquires the assets of another corporation in a taxable transaction? For a seller when he or she exchanges stock in a taxable transaction? In a...

Q: What tax and nontax advantages and disadvantages accrue when an acquiring corporation

What tax and nontax advantages and disadvantages accrue when an acquiring corporation purchases all of a target corporation’s stock for cash and subsequently liquidates the target corporation?

Q: Why might a parent corporation make a Sec. 338 election after

Why might a parent corporation make a Sec. 338 election after acquiring a target corporation’s stock? When would such an election not be advisable?

Q: a. Holt Corporation acquires all the stock of Star Corporation and

a. Holt Corporation acquires all the stock of Star Corporation and makes a timely Sec. 338 election. The adjusted grossed-up basis of the Star stock is $2.5 million. The FMV of tangible assets on Star...