Questions from Individual Taxation

Q: Describe the advantages (if any) of using a reverse triangular

Describe the advantages (if any) of using a reverse triangular form of Type A reorganization in acquiring other corporations.

Q: Describe the three hurdles a taxpayer must pass if he wants to

Describe the three hurdles a taxpayer must pass if he wants to deduct a loss from his share in an S corporation. What other loss limitation rule may impact the deductibility of losses from an S corpor...

Q: What tax benefits does the buyer hope to obtain by making a

What tax benefits does the buyer hope to obtain by making a §338 or §338(h)(10) election? Describe how this election might affect the value offered for the target corporation.

Q: Cathy, Heathcliff, and Isabelle are equal shareholders in Wuthering Heights

Cathy, Heathcliff, and Isabelle are equal shareholders in Wuthering Heights (WH), an S corporation. Heathcliff has decided he would like to terminate the S election. In the following alternative scena...

Q: Marcus is the CEO of publicly traded ABC Corporation and earns a

Marcus is the CEO of publicly traded ABC Corporation and earns a salary of $1,500,000. Assume ABC has a 21 percent marginal tax rate. What is ABC’s after tax cost of paying Marcus’s salary?

Q: On May 1, year 1, Anna received 5,000

On May 1, year 1, Anna received 5,000 shares of restricted stock from her employer, Jarbal Corporation. On that date, the stock price was $5 per share. On receiving the restricted stock, Anna made the...

Q: This year, Jolt Inc. reported $40,000 of

This year, Jolt Inc. reported $40,000 of taxable income before any charitable contribution deduction. Jolt contributed $10,000 this year to Goodwill Industries, a public charity. Compute the company’s...

Q: Nicole’s employer, Poe Corporation, provides her with an automobile allowance

Nicole’s employer, Poe Corporation, provides her with an automobile allowance of $20,000 every other year. Her marginal tax rate is 32 percent. Poe Corporation has a marginal tax rate of 21 percent. A...

Q: Spartan Corporation, a U.S. corporation, reported $

Spartan Corporation, a U.S. corporation, reported $2 million of pretax income from its business operations in Spartania, which were conducted through a foreign branch. Spartania taxes branch income at...

Q: Sandra would like to organize BAL as either an LLC (taxed

Sandra would like to organize BAL as either an LLC (taxed as a sole proprietorship) or a C corporation. In either form, the entity is expected to generate an 8 percent annual before-tax return on a $5...