Questions from Federal Taxation

Q: Jed acquired 25% of the stock of Alpha (basis of

Jed acquired 25% of the stock of Alpha (basis of $100,000) 12 years ago, and the other 75% was purchased by Zia (basis of $400,000) three years ago. Alpha enters into a tax-free consolidation with Bet...

Q: Target Corporation holds assets with a fair market value of $4

Target Corporation holds assets with a fair market value of $4 million (adjusted basis of $2.2 million) and liabilities of $1.5 million. It transfers assets worth $3.7 million to Acquiring Corporation...

Q: Paloma purchased all of the outstanding Dove stock six years ago.

Paloma purchased all of the outstanding Dove stock six years ago. Dove has prospered under Paloma’s direction, and now Hawk Corporation is interested in acquiring Dove, but not directly. Hawk forms a...

Q: Explain the tax consequences to a shareholder of a corporation in the

Explain the tax consequences to a shareholder of a corporation in the process of liquidation under the general rule of § 331.

Q: Megan is an accountant for KnoxCo. She is a telecommuter and

Megan is an accountant for KnoxCo. She is a telecommuter and works most days from her home in Tennessee. Twice a month, she travels to Georgia for a staff meeting at the employer’s Atlanta headquarter...

Q: Shelly Zumaya (2220 East Hennepin Avenue, Minneapolis, MN 55413

Shelly Zumaya (2220 East Hennepin Avenue, Minneapolis, MN 55413) is the president and sole shareholder of Kiwi Corporation (stock basis of $400,000). Incorporated in 2006, Kiwi Corporation’s sole busi...

Q: Sweeney originally contributed $175,000 in cash for a one

Sweeney originally contributed $175,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC’s income was $90,000 a...

Q: When Bruno’s basis in his LLC interest is $150,000

When Bruno’s basis in his LLC interest is $150,000, he receives cash of $55,000, a proportionate share of inventory, and land in a distribution that liquidates both the LLC and his entire LLC interest...

Q: Assume the same facts as in Problem 31, except that A

Assume the same facts as in Problem 31, except that A uses a single-factor apportionment formula that consists solely of sales and B uses a three-factor apportionment formula that equally weights sale...

Q: Create, Inc., produces inventory in its foreign manufacturing plants for

Create, Inc., produces inventory in its foreign manufacturing plants for sale in the United States. Its foreign manufacturing assets have a tax book value of $5 million and a fair market value of $15...