ACCT 730 - Week 3

ACCT 730 - Week 3 - ACCT 730 PROBLE M SET #3 Chapter 6:...

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ACCT 730 PROBLE M SET #3 Chapter 6: Problem 35, 49, and 64 Chapter 7: Problems 24 and 33 6-#35: Since Condor owns 100% of the stock in Dove Corporation, when Condor liquidates Dove and makes no special election, Condor will not recognize gain or loss on the liquidation as it's a liquidation of a subsidiary. Also, Dove will recognize neither gain nor loss on distributions of property to Dove Corporation. When Condor liquidates Dove and makes no special election, Condor's basis in Dove would be $800,000 (Dove's basis in its assets) instead of $950,000. Condor's basis of Dove's stock ($950,000) disappears so Condor's loss on its stock investment in Dove will never be recognized. 6-#49: Value of the stock in gross estate = 57% > 35% Since the value of the stock in Theresa's gross estate exceeds 35% of value of her adjusted gross estate, there is no recognized gain or loss on the redemption of $700,000. The redemption in excess of these expenses ($1,300,000) may qualify for sale or exchange
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This note was uploaded on 04/07/2011 for the course ACCT 640 taught by Professor N/a during the Spring '11 term at Davenport.

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ACCT 730 - Week 3 - ACCT 730 PROBLE M SET #3 Chapter 6:...

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