Questions from Federal Taxation

Q: As part of a Type C reorganization, Ash Corporation exchanges $

As part of a Type C reorganization, Ash Corporation exchanges $250,000 of its voting common stock and $50,000 of its bonds for all of Texas Corporation’s assets. Texas liquidates, with each of its two...

Q: As part of a Type C reorganization, Tulsa Corporation exchanges assets

As part of a Type C reorganization, Tulsa Corporation exchanges assets having a $300,000 FMV and a $175,000 adjusted basis for $250,000 of Akron Corporation voting common stock and Akron’s assumption...

Q: Allen Corporation plans to acquire all the stock in Taylor Corporation in

Allen Corporation plans to acquire all the stock in Taylor Corporation in a stock-for-stock exchange. Which of the following transactions will qualify as a Type B reorganization? a. All of Taylor’s c...

Q: Trent Corporation’s single class of stock is owned equally by Juan and

Trent Corporation’s single class of stock is owned equally by Juan and Miguel, who are unrelated. Juan has a $125,000 basis in his 1,000 Trent shares, and Miguel has a $300,000 basis in his 1,000 Tren...

Q: Austin Corporation exchanges $1.5 million of its voting common

Austin Corporation exchanges $1.5 million of its voting common stock for all of Travis Corporation’s single class of stock. Ingrid, who owns all the Travis stock, has a $375,000 stock basis. Immediate...

Q: Barbara organizes Blue LLC on May 17 of the current year.

Barbara organizes Blue LLC on May 17 of the current year. What is the entity’s default tax classification? Are any alternative classification(s) available? If so, (1) how does Barbara elect the altern...

Q: Nora transfers to Needle Corporation depreciable machinery originally costing $18,

Nora transfers to Needle Corporation depreciable machinery originally costing $18,000 and now having a $15,000 adjusted basis. In exchange, Nora receives all 100 shares of Needle stock having an $18,0...

Q: On January 30 of the current year, Ashton Corporation purchased from

On January 30 of the current year, Ashton Corporation purchased from Cathy 10% of Todd Corporation stock for $250,000 in cash. On May 30 of the following year, Andrea and Bill each exchange one-half o...

Q: Road Corporation is owned equally by four shareholders. It conducts activities

Road Corporation is owned equally by four shareholders. It conducts activities through two operating divisions: the road construction division and the meat packing division. To segregate the two activ...

Q: Light Corporation is owned equally by two individual shareholders, Bev and

Light Corporation is owned equally by two individual shareholders, Bev and Tarek. The shareholders no longer agree on how to manage Light’s operations. Tarek agrees to a plan whereby $500,000 of Light...