Exam 7: Corporate Acquisitions and Reorganizations

Roby Corporation, a Tennessee corporation, decides to change its state of incorporation to Delaware to take advantage of its more favorable state corporation laws. Roby Corporation can take advantage of the Type F reorganization rules by

Identify which of the following statements is true.

Johnson Co. transferred part of its assets to Alive Corporation in exchange for all of Alive's stock. The Alive stock received for the assets was distributed to the Johnson shareholders. What tax issues should the parties to the divisive reorganization consider?

Type A reorganizations include mergers and consolidations.

A stock acquisition that is not treated as a purchase for purposes of meeting the Sec. 338 rules is

Paris Corporation has E&P of $200,000. Paris owns all of Slider Corporation's stock, which is worth $80,000. The stock has been held for five years. Paris distributes all of the Slider stock and $20,000 cash to a 50% shareholder in exchange for all of the shareholder's 100 shares of Paris stock. The exchange qualifies as a Sec. 355 split- off transaction. The 50% shareholder's basis in the Paris stock surrendered is $90,000. What is the amount of the gain that the 50% shareholder must recognize?

Brad exchanges 1,000 shares of Goodyear Corporation stock having a $15,000 basis for Atlas Corporation stock having a $25,000 FMV as part of a Type A tax- free reorganization. Brad also receives $6,000 cash as part of the reorganization. How much gain must Brad recognize?

Identify which of the following statements is false.

When gain is realized by a target corporation from disposing of its assets in a tax- free reorganization, the gain is

Advance rulings are required for all reorganizations.

Identify which of the following statements is true.

Axle Corporation acquires 100% of Drexel Corporation's stock from Drexel's shareholders for $500,000 cash. Drexel Corporation has assets with a $600,000 adjusted basis and an $800,000 FMV. The assets are subject to $200,000 in liabilities. Drexel Corporation shareholders purchased their stock eight years ago for $300,000. Axle Corporation's basis in the Drexel Corporation stock is

Table Corporation transfers one- half of its assets to Chair Corporation in exchange for 100% of Chair Corporation's single class of stock. Following the exchange, Table Corporation distributes the Chair stock ratably to its shareholders. This transaction will constitute a

The Sec. 338 deemed sale rules require that 70% of the target corporation's stock be owned.

Identify which of the following statements is true.

Identify which of the following statements is true.

Acquiring Corporation acquires all of the stock of Target Corporation in a Type B (stock- for- stock) reorganization. Both corporations have always filed separate tax returns. Which one of the following statements regarding the acquisition is correct?

Briefly describe A, B, C, D, and G reorganization types.

Identify which of the following statements is true.

What are the two steps of a Sec. 338 deemed liquidation election?