Questions from Federal Taxation

Q: Murray Corporation’s stock is owned by about 1,000 shareholders,

Murray Corporation’s stock is owned by about 1,000 shareholders, none of whom own more than 1% of the outstanding shares. Pursuant to a tender offer, Said purchased all the Murray stock for $7.5 milli...

Q: Albert Corporation is a profitable publicly traded corporation. None of its

Albert Corporation is a profitable publicly traded corporation. None of its shareholders owns more than 1% of its outstanding shares. On December 31, 2016, Albert exchanged $8 million of its stock for...

Q: On January 10 of the current year, Austin Corporation acquires for

On January 10 of the current year, Austin Corporation acquires for cash 8% of Travis Corporation’s single class of stock. On August 25 of the current year, Austin makes a tender offer to exchange Aust...

Q: ABC Corporation is the object of a hostile takeover bid by XYZ

ABC Corporation is the object of a hostile takeover bid by XYZ Corporation. ABC incurs a total of $400,000 in attorneys’ fees, accounting fees, and printing costs for information mailed to ABC shareho...

Q: Diversified Corporation operates a successful bank with ten branches. Al,

Diversified Corporation operates a successful bank with ten branches. Al, Bob, and Cathy created Diversified six years ago and own all the Diversified stock in equal shares. Diversified has constructe...

Q: Tom Smith owns 100% of Alpha Corporation’s single class of stock

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....

Q: Angel Macias is considering selling his business (organized as Theta Corporation

Angel Macias is considering selling his business (organized as Theta Corporation), which has the following assets and liabilities: Theta’s balance sheet also shows $200,000 of accou...

Q: Barbara transfers to Moore Corporation $10,000 cash and machinery

Barbara transfers to Moore Corporation $10,000 cash and machinery having a $15,000 basis and a $35,000 FMV in exchange for 50 shares of Moore stock. The machinery was used in Barbara’s business, origi...

Q: Carol owns all the stock of P Corporation and J Corporation.

Carol owns all the stock of P Corporation and J Corporation. P operates six automotive service franchises in a metropolitan area. The service franchises have been a huge success in their first three y...

Q: P and S Corporations have filed consolidated tax returns for ten years

P and S Corporations have filed consolidated tax returns for ten years. P and S use the accrual method of accounting, and they use the calendar year as their tax year. P and S report separate return t...