Tax Codes

Question 1

IRC 338(h)(10)

Answer 1

Treats taxable stock sale of a S-corp or C-corp subsidiary like a taxable asset sale

Question 2

IRC 197

Answer 2

Amortization on goodwill and other intangibles are tax deductible

Question 3

IRC 265

Answer 3

Limits the tax deductibility of interest expense when the proceeds of borrowing are used to purchase tax exempt securities

Question 4

IRC 382

Answer 4

Limits the use of a target’s tax attributes (e.g. NOLs) post-acquisition

Question 5

IRC 162(m)

Answer 5

Limits tax deductibility of executive compensation to $1M

Question 6

IRC 1258

Answer 6

Long term gains resulting from use of forward contracts are taxed as ordinary income (ignorance of this tax code section led to a UCLA faculty member passing out)

Question 7

IRC 1259

Answer 7

Causes constructive sale of appreciated property to be immediately taxable

Question 8

IRC 332

Answer 8

Allows for tax-free liquidation of corporate subsidiaries

Question 9

IRC 754

Answer 9

Provides for a step-up in tax basis in the assets of a partnership

Question 10

IRC 351

Answer 10

Corporate formations are tax-free to founders contributing property in return for stock

Question 11

IRC 368(a)(1)(A)

Answer 11

Tax free merger, stock and cash possible consideration

Question 12

IRC 368(a)(1)(B)

Answer 12

Tax free stock for stock merger

Question 13

IRC 302(b)(1)

Answer 13

Stock redemptions are taxed as sales if they are not essentially equivalent to a dividend

Question 14

IRC 302(b)(2)

Answer 14

Stock redemptions are taxed as sales if they are substantially disproportionate

Question 15

IRC 302(b)(3)

Answer 15

Stock redemptions are taxed as sales if they result in complete termination of shareholder interest

Question 16

IRC 355

Answer 16

Specifies various requirements in order for a spin-off to be tax-free