Determine the Federal income tax consequences for Citron

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Problem - Citron enters into a "Type C" restructuring with Ecru. Ecru transfers $800,000 of its voting stock for Citron's $1,500,000 (basis $600,000) and $700,000 liabilities. Citron retains one asset, land, which it distributes to its sole individual shareholder, Electra. The land is valued at $150,000, and its basis is $80,000. Electra's basis in her Citron stock is $970,000.

Required - Determine the Federal income tax consequences for Citron, Ecru, and Electra, including Ecru's basis in the assets it receives from Citron. Determine Electra's basis in the Ecru stock she receives, using spreadsheet software such as Microsoft Excel.

Reference no: EM132646899

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