Final calculations

Question 0

Compare c corp to a corp 
#1b

Answer 0

Same as #1a

Question 1

Compare c corp to a corp 
#1A

Answer 1

Price-asset basis35%factor/(1-35%*factor)

Question 2

Compare c corp to a corp 
#1c

Answer 2

1. Calc stock sale
A. Price-S/H basis -CLCF * .20
B. Price - A
2. Calc asset sale 
A. Price- S/H basis * .35
B. Price - A
C. B - S/H basis - CLCF * .2
D. Stock sale - asset sale 
E. D/.8
F. E/.65
G. F + price

Question 3

Compare c corp to a corp 
#1D

Answer 3

A. No 338H10 = stock sale
B. W/ 338H10 = price-S/H basis 
C. Sep B into OI & CG
D. Add OI + CG
E. Price - D
F. Stock sale - E / .8
G. F + price

Question 4

Compare c corp to a corp

E

Answer 4

No

Question 5

Compare c corp to a corp

F

Answer 5

Yes

Question 6

Compare c corp to a corp

G

Answer 6

A. C-corp = stock sale
B. Answer to #1 - S/H basis 
C. Separate into OI (40%) & CG
D. Add OI + CG
E. Answer to #1 - D
F. E - stock sale

Question 7

368 B

Answer 7

Tax free acquisition structure - 100% stick for stock merger

Question 8

Reverse triangular merger

Answer 8

368 tax free structure in which a subsidiary of the acquirer is merged into the target with the target corporation surviving as a subsidiary of the acquirer

Question 9

IRC 351

Answer 9

Provides tax free treatment in corporation formation transaction

Question 10

IRC 265

Answer 10

Disallows interest expense on debt financing proceeds invested in tax exempt bonds

Question 11

How did Worldcom/MCI reduce its state income taxes pre-bankruptcy?

Answer 11

Via a royalty payment from the profitable MCI operating companies to the worldcom parent

Question 12

If you were purchasing a target corporation with a large amount of NOLs, and for which its employees had substantial amounts of in the money stock options, what tax planning strategy would you consider?

Answer 12

Structure the deal so the target employees options are exchanged for acquirer options and are not deemed to be exercised pre-close, but rather are exercised post-closing.

Question 13

What liability was the tribune corporation hit with associated with its prior acquisition activities?

Answer 13

Prior tax liabilities with transactions completed by times mirror. Tribune acquired times mirror and inherited its contingent tax liabilities

Question 14

How did ITT repel the takeover bid from Hilton?

Answer 14

Threatened to complete a spin-off

Question 15

How did Times Mirror reduce the income tax on the monetization of its investment Netscape?

Answer 15

Sold an equity derivative which was economically similar to a short against the box. The sale of the convertible debt instrument did not create taxable income