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Gre4nikov [31]
3 years ago
11

Juan transferred 100 percent of his stock in Rosa Company to Azul Corporation in a Type B stock-for-stock exchange. In exchange,

he received stock in Azul with a fair market value of $1,000,000. Juan's tax basis in the Rosa stock was $400,000. What amount of gain does Juan recognize in the exchange and what is his basis in the Azul stock he receives
Business
1 answer:
dybincka [34]3 years ago
6 0

Answer:

no gain is realized by juan. His basis in the Azul stock he receives is also the same $400,000 tax basis

Explanation:

According to section 368 of the internal revenue code of 1986, a type B stock-for-stock involves when the stock of a target company is traded in exchange for a portion of the stock of an acquiring company. When this occurs, the acquiring company takes over the shareholder of the target company and the target company is no longer part of its shareholders. However, the target company will now hold a minority shareholder of the acquiring company

From the question, Juan transferred 100 percent of his Rosa Company's stock to Azul Corporation in exchange for stock in Azul valued at $1,000,000 (except juan sells his Azul stock).

Therefore no gain is realized by juan. His basis in the Azul stock he receives is also the same $400,000 tax basis in the Rosa stock transferred to Azul Corporation.

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Answer: Rise initially, but eventually fall.

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2 years ago
Which of the actions must be taken if a municipality wishes to raise its debt limit?
kaheart [24]

Answer:

Public referendum

Explanation:

Public referendum

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3 years ago
To record a​ 6% stock​ dividend, accountants use​ ________. To record a​ 55% stock​ dividend, accountants use​ ________. A. par
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Computers

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5 0
3 years ago
Read 2 more answers
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Answer:

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GenaCL600 [577]

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Whilst a shop lowers its charges via a sale, though, customers are more willing to buy due to the fact they recognize they're now not set as a whole lot of money on the line. extra often than not, customers who like the stuff they buy on sale will turn out to be coming lower back to shop for it once more, despite the fact that it's not priced at a reduction.

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A clearance is a unique sort of sale that could appeal to extra customers than traditional sales. this is due to the shop seeking to take away positive items for one cause or any other. the store is probably going out of business, the objects are going out of season, or there is not sufficient room in the shop for new gadgets.

Learn more about the sale here brainly.com/question/25586322

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7 0
1 year ago
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