Do you believe the requirements of section 302(b)(2) are met

Assignment Help Other Subject

Reference no: EM133620617

Problem I. All of the stock of K Corporation is owned by L and M. L and M are unrelated individuals. L owns 50 shares of the voting common stock of K Corporation, and M owns 50 shares of such voting common. Each shareholder has a basis of 5 in each share. The voting common is the sole class of stock of K Corporation, and no other shares are outstanding. K Corporation redeems for cash of 100 10 of M's shares, twenty percent of M's shares. Do you believe the requirements of Section 302(b)(2) are met with respect to such redemption? Explain briefly your analysis.

Problem II. All of the stock of K Corporation is owned by L and M. L and M are unrelated individuals. L owns 50 shares of the voting common stock of K Corporation, and M owns 50 shares of such voting common. Each shareholder has a basis of 5 in each share. The voting common is the sole class of stock of K Corporation, and no other shares are outstanding. K Corporation redeems for cash of 100 10 of M's shares, twenty percent of M's shares. Do you believe it can be argued that the redemption of 10 of M's common shares in K Corporation is not essentially equivalent to a dividend within the meaning of Section 302(b)(1)? Explain your reasoning.

Problem III. Assume again the same basic facts as in question I, but in this case L is a partnership. N, an individual unrelated to L and M, owns a 60 percent interest in the capital, profits and losses of L, and M has a 40 percent interest in such capital, profits and losses of L. Again, before the redemption transaction in question, L owns 50 voting common shares in K Corporation and M owns 50 such shares. In this case K Corporation redeems 20 of M's voting common in K Corporation. Do you believe that the requirements of Section 302(b)(2) would be satisfied by this redemption transaction?

Reference no: EM133620617

Questions Cloud

How can these four levels work in conjunction to educate : How can these four levels work in conjunction to educate, promote health, and control and eradicate diseases? How does health care play a role in the promotion

What is an expected consequence of this approach to omars : read the smallest line he can see covering one eye at a time. What is an expected consequence of this approach to Omar's visual acuity screening

Supplier from transactional to collaborative : Your firm wants to advance the relationship with this supplier from transactional to collaborative.

Explain how the evidence-based teaching strategy : Explain how the evidence-based teaching strategy addresses learner development in each domain (cognitive, psychomotor, and affective).

Do you believe the requirements of section 302(b)(2) are met : Do you believe the requirements of Section 302(b)(2) are met with respect to such redemption? Explain briefly your analysis.

What is the likely diagnosis for elijah : movements of his neck and face. Last night, he could not keep his balance and fell in his living room, hurting his knee. What is the likely diagnosis for Elijah

Discuss surrounding transfer of juveniles to adult court : Discuss the controversy surrounding the transfer of juveniles to adult court. Include evidence regarding the consequences of such transfers.

What other areas of the health care world use qualitative : Its data is collected analyzed to help us improve our practice. What other areas of the health care world use qualitative data often

Managing project risks in the future : How did you manage this risk? How would you apply this to managing project risks in the future?

User Account

All Pages