Past Exam for ACIS 4324 - Advanced Income Tax with Glynn at Virginia Tech (VT)

Exam Information

Material Type:Exam
Class:ACIS 4324 - Advanced Income Tax
Subject:Accounting & Information Systems
University:Virginia Polytechnic Institute And State University
Term:Spring 2005
  • S Corporation
  • Corporation
  • S-Corporation
  • Reorganization
  • Shareholders
  • Immediately
  • Appreciated
  • Outstanding Stock
  • Proprietorship
  • Cash Purchase
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Sample Document Text

1 ACIS 4324, Test 3.2, Spring 2005 N Problems 1 and 2 The fair market value (replacement cost) of T Corporation's assets is $1,000,000. The book value of the assets is $300,000. The assets are all depreciable properties and inventory. T Corporation also has a $100,000 NOL. Mr. Towns 100% of the T stock and he isin the 35 % ordinary income marginal tax bracket and the 15% capital gains marginal tax bracket. T's basis in the stock is $100,000. M Corporation is considering acquiring T Corporation and Mr. T is interested in selling so that he can retire. M Corporation and T Corporation are in the 35% marginal tax bracket and T does not have a net operating loss carryover. 1. 2. 3. If the transaction is a sale of assets followed by a liquidation of T Corporation. a. T Corporation will be allowed to use the NOL to reduce its taxable gain. b. T's after-tax proceeds will be ($1,000,000 - .15($600,000) = $910,000. @ Only Mr. T will have taxable gain. d. Only T Corporation will have ta...

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