Questions from Federal Taxation

Q: B.I.G. Corporation sold a plot of undeveloped

B.I.G. Corporation sold a plot of undeveloped land to SubCo this year for Critical Thinking $100,000. B.I.G. had acquired the land several years ago for $40,000. T he consolidated return also reflects...

Q: PorCo, a foreign corporation not engaged in a U.S

PorCo, a foreign corporation not engaged in a U.S. trade or business, received a $600,000 dividend from USCo, a domestic corporation. ForCo incurred $45,000 in expenses related to earning the di viden...

Q: Through a "Type C" reorganization, Springer Corporation was merged

Through a "Type C" reorganization, Springer Corporation was merged into Spaniel Corporation last year. Springer shareholders received 40% of the Spaniel stock in exchange for all of their Springer sha...

Q: Mila purchased a Zaffre Corporation $100,000 bond 10 years

Mila purchased a Zaffre Corporation $100,000 bond 10 years ago for its face value. The bond pays 5% interest annually. In a ''Type E" reorganization, Zaffre exchanges Mila's bond with 10 years ren1ain...

Q: Your firm has assigned you to work with Jeri Byers, the

Your firm has assigned you to work with Jeri Byers, the tax director of a small group of corporations. The group qualifies to file on a consolidated basis and plans to make its first election to file...

Q: Butler Manufacturing, Inc., a calendar year domestic corporation, operates

Butler Manufacturing, Inc., a calendar year domestic corporation, operates Communications a branch in Ireland. In the current year, the branch generated 750,000 euros in net profit. On December 31 of...

Q: Eta Corporation approaches Lily White, the CEO and sole shareholder of

Eta Corporation approaches Lily White, the CEO and sole shareholder of MuCo, regarding the acquisition of MuCo's cat toy division assets (worth $1.3 million). As selling the assets would create a $600...

Q: Locket, a U.S. C corporation, makes a

Locket, a U.S. C corporation, makes a sale to a customer in Sustainia, a country that applies a 25% income tax to business profits. The customer found out about Locket through an internet search. Lock...

Q: USCo incorporated it5 foreign branch operations in Italy by transferring the branch's

USCo incorporated it5 foreign branch operations in Italy by transferring the branch's assets to a foreign corporation in return solely for stock in the new corporation. All of the branch's assets are...

Q: Brutus Corporation transferred inventory (basis of $10, fair market

Brutus Corporation transferred inventory (basis of $10, fair market value of $30) and machinery used in a U.S. factory (adjusted basis of S50, fair market value of $75) to MapleLeaf, a newly formed co...