Acquisitive Reorganizations I. A. T Corporation is owned by four individuals A, B, C and D...

Acquisitive Reorganizations

I. A. T Corporation is owned by four individuals A, B, C and D and their respective adjusted basis in their T stock are $19,000, $87,000, $114,000 and $25,000. T’s assets consist of the following: Cash $20,000; Inventory $200,000 (AB $140,000); Land $180,000 (AB $210,000). Pursuant to the laws of the State of New York, T is merged into P Corporation pursuant to a plan whereby each shareholder of T is to receive $75,000 of P stock and $25,000 of cash. P is a publicly traded company whose assets, net of liabilities, are valued at $25 million. What are the tax consequences of this merger to T, T’s shareholders and P?

1. How would your answer to part A, above, change if each shareholder were to receive only $25,000 of P stock and $75,000 of cash?

2. How would your answer to part A, above, change if each shareholder, other than D, was to receive only P stock and D was to receive $100,000 of cash?

3. How would your answer to part A, above, change if each shareholder, other than D, were to receive $100,000 of cash and D was to receive only P stock?

Solutions

Expert Solution

ekkarill92 answered 9 months ago

Next > < Previous

Related Solutions

22. Corporation Z is owned entirely by two individuals, C and D. C owns 60 shares...

22. Corporation Z is owned entirely by two individuals, C and D. C owns 60 shares of Z common stock bought in one transaction for $1,200. D owns 40 shares of Z common stock with a basis of $60 per share. The stock's fair market value is $40 per share. Z's E&P is $1,000. C sells 60 shares to Z for $1,800. D sells 10 shares back to Z for $400. a. The redemption will be treated as a dividend....

t CASE 2: AMAZON LTD Multibus Ltd manufactures four products namely; A, B, C and D...

t CASE 2: AMAZON LTD Multibus Ltd manufactures four products namely; A, B, C and D using the same plant and processes. The following data relate to the production activities of the company for the period ended 30th November 2008: Product Number of units Material cost per unit (Sh) Labour cost per unit (Sh) Machine time per unit (hours) A 500,000 5 0.5 0.25 B 5,000,000 5 0.5 0.25 C 600,000 16 2.0 1.00 D 7,000,000 17 1.5 1.50 ...

Four firms (A, B, C, and D) play a simultaneous-move pricing game. Each firm (i) may...

Four firms (A, B, C, and D) play a simultaneous-move pricing game. Each firm (i) may choose any price Pi ∈ [0, ∞) with the goal of maximizing its own profit. (Firms do not care directly about their own quantity or others’ profits.) Firms A and B have MC = 10, while firms C and D have MC = 20. The firms serve a market with the demand curve Q = 100 – P. All firms produce exactly the same...

Given the following four numbers: (a) 01101010 (b) 11110001 (c) 10001000 (d) 00100010 Question: (i) Perform...

Given the following four numbers: (a) 01101010 (b) 11110001 (c) 10001000 (d) 00100010 Question: (i) Perform (a) + (b) in the 2’s complement form. (ii) Perform (d) – (c) in the 2’s complement form. (iii) Multiply (a) by (b) in the 2’s complement form. (iv) Divide (c) by (d) in the 2’s complement form.

Consider the cross: A/a; b/b; C/c; D/d; E/e x A/a; B/b; c/c; D/d; e/e a) what...

Consider the cross: A/a; b/b; C/c; D/d; E/e x A/a; B/b; c/c; D/d; e/e a) what proportion of the progeny will phenotypically resemble the first parent? b) what proportion of the progeny will genotypically resemble neither parent?

An experiment consists of four outcomes (A, B, C, D) with P(A) = 0.2, P(B) =...

An experiment consists of four outcomes (A, B, C, D) with P(A) = 0.2, P(B) = 0.3, and P(C) = 0.4. The P(D) is 0.500 0.024 0.100 0.900 Given that event E has a probability of 0.3, the probability of the complement of event E cannot be determined with the above information can have any value between zero and one must be 0.7 is 0.3 If P(A) = 0.38, P(B) = 0.83, and P(A Ç B) = 0.57; then P(A È...

There is a chess team with four players {A, B, C, D} training for a competition....

There is a chess team with four players {A, B, C, D} training for a competition. The coach wants all players to play each other. Ignore which player is chosen to take the first move. 1. Do we use a counting rule for combinations or for permutations to calculate the total number of possible games if all players must play each other once? (Only one is correct.) 2. Calculate by hand (you can use a calculator but show some work),...

There are four urns, which we label A, B, C, and D, and each of these...

There are four urns, which we label A, B, C, and D, and each of these urns contains some white balls and some black balls, as specified below.•UrnAhas3white balls and2black balls•UrnBhas2white balls and6black balls•UrnChas3white balls and6black balls•UrnDhas5white balls and7black balls one of the urns is chosen at random, and then one of the balls is selected from the chosen urn. (a) What is the probability that urnAis chosen, and then a white ball is chosen from thaturn? (b) What is...

with ExxonMobil corporation what is the financial Analysis? A) probability B) liquidity C)Leverage D)Market Summary I...

with ExxonMobil corporation what is the financial Analysis? A) probability B) liquidity C)Leverage D)Market Summary I stock Price ii P/E Ratio iii Historical Trends brief summary of the following

(6ptseach)Let A={a,b,c},B={b,c,d},C ={b,c,e}. (a) Explicitly ﬁnd (i) A∪(B∩C), (ii)(A∪B)∩C, and (iii)(A∪B)∩(A∪C). (iv)Which of these sets are...

(6ptseach)Let A={a,b,c},B={b,c,d},C ={b,c,e}. (a) Explicitly ﬁnd (i) A∪(B∩C), (ii)(A∪B)∩C, and (iii)(A∪B)∩(A∪C). (iv)Which of these sets are equal? (b) Explicitly ﬁnd (i) A∩(B∪C), (ii)(A∩B)∪C, and (iii)(A∩B)∪(A∩C). (iv)Which of these sets are equal? (c) Explicitly ﬁnd (i)(A−B)−C and (ii) A−(B−C). (iii)Are these sets equal?

Subjects