What are the us tax consequences to all of shareholders

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Assignment:

X Corp. has (i) 100 shares of Class A common stock outstanding and (ii) 50 shares of Class B common outstanding.

(a) What are the U.S. tax consequences to all of the shareholders if X Corp. makes a pro rata distribution of nonconvertible preferred stock to both classes?

(b) Assume, instead, that X Corp. made a pro rata distribution of nonconvertible preferred stock to both classes but Class B common shareholders have the option to take either cash or stock. What are the U.S. tax consequences to all of the shareholders?

(c) Assume, instead, that X Corp. made a pro rata distribution to the Class A shareholders of Class A shares and a cash distribution to Class B shareholders. What are the U.S. tax consequences to all of the shareholders?

Reference no: EM133335590

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