Harrison Corporation, a C corporation, is part of a consolidated group, with assets consisting of inventory with a pre-transaction tax basis of $3,200 and value of $40,000. Harrison also has $3,200 of liabilities. Debra Smith acquires 100% of Harrison's outstanding stock for $36,800, and the parties make a Sec. 338(h)(10) election. Prepare a letter to Debra that answers the following questions: What is Harrison Corp.'s adjusted grossed-up basis (AGUB)? What is the inventory's allocated tax basis? How much gain will be realized when the inventory is sold?
Harrison Corporation, a C corporation, is part of a consolidated group, with assets consisting of inventory with a pre-transaction tax basis of $3,200 and value of $40,000. Harrison also has $3,200 of liabilities. Debra Smith acquires 100% of Harrison's outstanding stock for $36,800, and the parties make a Sec. 338(h)(10) election. Prepare a letter to Debra that answers the following questions: What is Harrison Corp.'s adjusted grossed-up basis (AGUB)? What is the inventory's allocated tax basis? How much gain will be realized when the inventory is sold?
Chapter6: Corporations: Redemptions And Liquidations
Section: Chapter Questions
Problem 58P
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Harrison Corporation, a C corporation, is part of a consolidated group, with assets consisting of inventory with a pre-transaction tax basis of $3,200 and value of $40,000. Harrison also has $3,200 of liabilities. Debra Smith acquires 100% of Harrison's outstanding stock for $36,800, and the parties make a Sec. 338(h)(10) election. Prepare a letter to Debra that answers the following questions:
- What is Harrison Corp.'s adjusted grossed-up basis (AGUB)?
- What is the inventory's allocated tax basis?
- How much gain will be realized when the inventory is sold?
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT