Questions from Federal Taxation

Q: Puce has two individual shareholders, Abram and Carmella. The shareholders

Puce has two individual shareholders, Abram and Carmella. The shareholders purchased their stock in Puce four years ago at a cost of $500,000 each. For the past nine years, Puce has been engaged in tw...

Q: Rufous Corporation just lost a $1.5 million product liability

Rufous Corporation just lost a $1.5 million product liability lawsuit. Its assets currently are worth $2 million, and its outstanding liabilities amount to $800,000 without considering the lawsuit los...

Q: Aqua Corporation is a retail operation specializing in pool equipment and outdoor

Aqua Corporation is a retail operation specializing in pool equipment and outdoor furniture. It is very interested in merging with Icterine Corporation, a lamp manufacturer; Aqua is very profitable, a...

Q: The consolidated tax liability for most affiliated groups is assigned among die

The consolidated tax liability for most affiliated groups is assigned among die parent and its subsidiaries-each entity is responsible for "its share" of the tax. The Regulations allow several methods...

Q: Ramon and Sophie are the sole shareholders of Gull Corporation. Ramon

Ramon and Sophie are the sole shareholders of Gull Corporation. Ramon and Sophie each have a basis of $100,000 in their 2,000 shares of Gull common stock. When its E & P was $700,000, Gull Corporation...

Q: Assume the same facts as in Problem 32, except that the

Assume the same facts as in Problem 32, except that the group members have adopted the relative tax liability tax-sharing method.

Q: Senior, Ltd., acquires all of the stock of JuniorCo for

Senior, Ltd., acquires all of the stock of JuniorCo for $30 million at the beginning of year 1. The group immediately elects to file income tax returns on a consolidated basis. Senior's operations gen...

Q: Continue with the facts of Problem 34. a. Assume

Continue with the facts of Problem 34. a. Assume instead that JuniorCo's tax year 2 produced a $6 million NOL. b. Same a5 part (a), except that JuniorCo's tax year 2 produced a $40 million NOL. c. Con...

Q: WhaleCo acquired all of the common stock of MinnowCo early in year

WhaleCo acquired all of the common stock of MinnowCo early in year 1 for $900,000, and MinnowCo immediately elected to join WhaleCo's consolidated Federal income tax return. As part of the takeover, W...

Q: Indeco, a U.S. C corporation, operates Grange

Indeco, a U.S. C corporation, operates Grange, a sales branch in Staccato. Indeco's U.S. corporate n1arginal tax rate is 21%; it is 15% for Staccato. Grange's pretax profit for the year is SI million....