On august 9 2010 egret corporation acquired 100 of the

Reference no: EM13597988

On August 9, 2010, Egret Corporation acquired 100% of the outstanding stock of Aqua Coorporation for $1million and made a qualified §338 election. On that date, Aqua Corporation had assets with a basis of $700,000 and E&P of $400,000. Assume that the aggregate deemed sale price and the adjusted grossed-up basis each equal $1.2 million and that Aqua Corporation is immediately liquidated. In general, what are the tax consequences to Egret and to Aqua of the §338 election and the liquidation of Aqua?

Reference no: EM13597988

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