Problem On April 23, 2022, Auk Corporation acquires 100% of the outstanding stock of Amazon Corporation (E & P of $750,000) for $1,200,000. Amazon Corporation has assets with a fair market value of $1,400,000 (basis of $800,000), no liabilities, and no loss or tax credit carryovers. Auk Corporation files a timely § 338 election. Assume that both the aggregate deemed sale price (ADSP) and adjusted grossed-up basis (AGUB) are $1,306,329. If an amount is zero, enter "0". If required, round your answers to the nearest dollar. a. What are the tax consequences of the § 338 election to Amazon Corporation and to Auk Corporation? ✓of $ Amazon is treated as a new Amazon Corporation is deemed to have sold its assets which results in a realized gain 506,329✔ of which s 506,329 ✔ recognized. corporation with E & P $ Amazon Corporation now has a basis of $ holding period in the assets begin on April 24, 2022 450,000 X. 1,306,329 ✔ in the assets, and its V. Auk Corporation has a recognized gain of $ Amazon Corporation stock is $ 1,200,000 ✓. 0 ✓ and its basis in the
Problem On April 23, 2022, Auk Corporation acquires 100% of the outstanding stock of Amazon Corporation (E & P of $750,000) for $1,200,000. Amazon Corporation has assets with a fair market value of $1,400,000 (basis of $800,000), no liabilities, and no loss or tax credit carryovers. Auk Corporation files a timely § 338 election. Assume that both the aggregate deemed sale price (ADSP) and adjusted grossed-up basis (AGUB) are $1,306,329. If an amount is zero, enter "0". If required, round your answers to the nearest dollar. a. What are the tax consequences of the § 338 election to Amazon Corporation and to Auk Corporation? ✓of $ Amazon is treated as a new Amazon Corporation is deemed to have sold its assets which results in a realized gain 506,329✔ of which s 506,329 ✔ recognized. corporation with E & P $ Amazon Corporation now has a basis of $ holding period in the assets begin on April 24, 2022 450,000 X. 1,306,329 ✔ in the assets, and its V. Auk Corporation has a recognized gain of $ Amazon Corporation stock is $ 1,200,000 ✓. 0 ✓ and its basis in the
Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations
Section: Chapter Questions
Problem 35P
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