Questions from Federal Taxation

Q: Alpha Corporation purchases all of Theta Corporation’s stock for $300,

Alpha Corporation purchases all of Theta Corporation’s stock for $300,000 cash. Alpha makes a timely Sec. 338 election. Theta’s balance sheet at the close of busine...

Q: In a merger in which it subsequently liquidates, Thomas Corporation transfers

In a merger in which it subsequently liquidates, Thomas Corporation transfers to Andrews Corporation all its assets and $100,000 of its liabilities in exchange for Andrews voting common stock, having...

Q: Silvia exchanges all her Theta Corporation stock (acquired August 1,

Silvia exchanges all her Theta Corporation stock (acquired August 1, 2013) for $300,000 of Alpha Corporation voting common stock pursuant to Theta’s merger into Alpha. Immediately after the stock-for-...

Q: Yong owns 100% of Theta Corporation stock having a $600

Yong owns 100% of Theta Corporation stock having a $600,000 adjusted basis. As part of the merger of Theta into Alpha Corporation, Yong exchanges his Theta stock for $750,000 cash and Alpha common sto...

Q: Joe, Karen, and Larry form Gray Corporation. Joe contributes

Joe, Karen, and Larry form Gray Corporation. Joe contributes land (a capital asset) having an $8,000 adjusted basis and a $15,000 FMV to Gray in exchange for Gray ten-year notes having a $15,000 face...

Q: Springs Corporation has developed a nature park at the site of Blue

Springs Corporation has developed a nature park at the site of Blue Springs. Because Newberry Corporation wants to develop several other springs in the area, Newberry wants to merge with Springs under...

Q: Turbo Corporation has one million shares of common stock and 200,

Turbo Corporation has one million shares of common stock and 200,000 shares of nonvoting preferred stock outstanding. Pursuant to a merger under state law, Ace Corporation exchanges its common stock w...

Q: In a merger under state law, Anchor Corporation acquires all the

In a merger under state law, Anchor Corporation acquires all the assets of Tower Corporation. Tower’s assets have a $5 million FMV and a $2.2 million adjusted basis. Assuming Tower liquidates, which o...

Q: Armor Corporation exchanges $1 million of its common stock and $

Armor Corporation exchanges $1 million of its common stock and $300,000 of Armor bonds for all of Trail Corporation’s outstanding stock. As part of the same transaction, Trail then merges into Armor,...

Q: Arnold Corporation plans to acquire all the assets of Turner Corporation in

Arnold Corporation plans to acquire all the assets of Turner Corporation in an asset-for-stock exchange. Turner’s assets have a $600,000 adjusted basis and a $1 million FMV. Which of the following tra...