Questions from Federal Taxation

Q: On July 20, 2017, Lilac Corporation purchased 25% of

On July 20, 2017, Lilac Corporation purchased 25% of the Coffee Corporation stock outstanding. Lilac Corporation purchased an additional 40% of the stock in Coffee on March 22, 2018, and an additional...

Q: On April 27, 2018, Auk Corporation acquires l00% of

On April 27, 2018, Auk Corporation acquires l00% of the outstanding stock of Amazon Corporation (E & P of $750,000) for $1.2 million. Amazon Corporation has assets with a fair market value of $1.4 mil...

Q: For each of the following independent statements, indicate whether the transaction

For each of the following independent statements, indicate whether the transaction will increase ( + ), decrease ( - ), or have no effect (NE) on the basis of a shareholder's stock in an S corporation...

Q: Big Corporation currently owns 25% of Small, Inc. Big

Big Corporation currently owns 25% of Small, Inc. Big acquired this stock two years ago by exchanging $375,000 of its preferred stock with Allie, one of the original owners of Small. Big had tried to...

Q: Your client, Big Corporation, and its wholly owned subsidiary,

Your client, Big Corporation, and its wholly owned subsidiary, LittleCo, file a consolidated return for Federal income tax purposes. Indicate both the financial accounting and the tax treatment of the...

Q: Boulder Corporation owns all of the stock of PebbleCo, so they

Boulder Corporation owns all of the stock of PebbleCo, so they constitute a Federal affiliated group and a parent-subsidiary controlled group. By completing the following chart, delineate for Boulder'...

Q: Grand Corporation owns all of the stock of Junior, Ltd

Grand Corporation owns all of the stock of Junior, Ltd., a corporation that has been declared bankrupt and holds no net assets. Junior still owes $1 million to wholesale, Inc., one of its suppliers, a...

Q: Cougar, Jaguar, and Ocelot corporations have filed on a consolidated

Cougar, Jaguar, and Ocelot corporations have filed on a consolidated, calendar year basis for many years. At the beginning of the tax year, the group elects to de-consolidate. The group's S6 million N...

Q: Child Corporation joined the Thrust consolidated group in year 1. At

Child Corporation joined the Thrust consolidated group in year 1. At the time it joined the group, Child held a $2 million NOL carryforward. On a consolidated basis, the members of Thrust generated si...

Q: Shepherd Corporation i5 considering acquiring RentCo by exchanging its stock (value

Shepherd Corporation i5 considering acquiring RentCo by exchanging its stock (value of $10 per share) for RentCo's only asset, a tract of land (adjusted basis of $150,000 and no liability). The yearly...