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Home work-Chapter 7.
Turn in one copy of your solutions at the start of class. (35 @ 3 Pts. = 105)
This homework has been updated for Spring 2011.
[Pg. 7-18] Mecklenburg owns all of the stock of Charlotte Corporation.
Both corporations have been active in
business for 20 years.
Mecklenburg distributes all of its Charlotte stock to the Mecklenburg stockholders.
stockholders do not surrender any of their Mecklenburg stock.
This is a:
[Pg. 7-18] Mecklenburg Corporation organized Charlotte Corporation and Pineville Corporation, and invested its
assets in these two subsidiaries.
Mecklenburg distributed all of its Charlotte stock and Pineville Corporation stock
to the Mecklenburg stockholders.
Those stockholders surrendered their Mecklenburg stock.
This was a:
owns Local Corporation with the following balance sheet.
Jon organized the Local Corporation and it has always been a C corporation.
Local Corp. Balance Sheet as of 12-31-10
Par value per share
Number of shares issued to Jon
Issue Price per share
Total Proceeds from stock issue to Jon
Additional Paid in Capital
Total Owner Equity of Jon
Huge Corporation acquires Jon’s stock on 12-31-10 by paying cash of $2,000,000. Local will be operated as a
No special election under Section 338 is made related to this acquisition.
After the acquisition, what is the basis of the fixed assets to Local Corporation?
none of these
[Pg. 7-10+, §368(a)(1)] In a type B reorganization, as defined by the Internal Revenue Code, the
Stock of the target corporation is acquired solely for the voting stock of either the
acquiring corporation or its parent.
Acquiring corporation must have control of the target corporation immediately after
Both I and
Neither I nor II
[Pg. 7-4, §368(a)(1)] Which one of the following is not a corporate reorganization as defined in the Internal
Mere change in identity.