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if T takes all of the stock of S in exchange for $24.73 in cash per share and did not make a Section 338

election. Assuming T issues bonds to raise the cash necessary to pay for the acquisition. Also Assuming S had 100 million shares outstanding.

1 Would this structure affect the tax basis in S assets relative to the offer

actually used? If so, by how much?

2.Why did T and S chose to structure the transaction this way?

Top Answer

1) The S corporation would not be able to recognize the gain on the... View the full answer

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