Reference no: EM131332843
Assignment
Split-Off
ParentCo sells street vending carts and has been in business for 10 years. The subsidiary, SubCo, has been in the business of selling refrigerated vending carts for 8 years. You are a 50% partner of ParentCo with Able. The basis of your shares is $80,000 while Able's basis is $60,000. On April 10, 20x1, ParentCo allocated 100% of SubCo stock to shareholder Able in exchange for the Able'sParentCo shares. Able'sParentCo shares are subsequently cancelled. There is a bona fide business purpose for this exchange. At the end of 20x1, ParentCo has $150,000 of E&P. The fair market value of ParentCo stock is $3,000/share and the fair market value of SubCo is $1,000/share.
a. What is the amount and character of the gain, loss or income that must be recognized by you as a result of the distribution of the SubCo stock?
b. What is the amount and character of the gain, loss or income that must be recognized by ParentCo as a result of the distribution of the SubCo stock?
c. What is Able's basis in the SubCo's stock?
d. When will Able's holding period for the SubCo stock begin?
Requirements:
Use the Excel Template (Attachment) for the Critical Thinking Assignment for this week. Clearly identify the requirement being addressed. Show or explain all calculations within the body of the submission document. This means that you must use formulas and links so that your thought process can be examined. Make good use of comments to convey your thought process as well.
No hard coding of solutions. Review the Critical Thinking grading rubric, which may be found in the Module 4 folder, to see how you will be graded on this assignment. Reach out to your instructor if you have questions about the assignment.
Attachment:- excel_attachment.xlsx
|
Prepare a paper on citizen-centric reporting
: Prepare a paper on Citizen-Centric Reporting. In your paper, discuss the purpose of Citizen-Centric Reporting, why you believe such reports are necessary, and what the AGA recommends as the format and content of the report.
|
|
What is required rate of return of this portfolio
: Dalia’s Biomedical Supplies has a stock with a beta of 0.85 and an expected return of 10%. Assume that short-term US treasury bills are currently earning 3% and the market risk premium is 5%. assuming an equal investment in the two assets, what is th..
|
|
Find the variance of ei and of eii
: Find the variance of EI and of EII when there are n buyers, whose private values are independent and uniformly distributed over [0, 1].
|
|
Null hypothesis and the alternative hypothesis
: (a) Identify the null hypothesis and the alternative hypothesis. (b) Determine the test statistic. Show all work; writing the correct test statistic, without supporting work, will receive no credit. (c) Determine the P-value for this test. Show..
|
|
What is the amount and character of the gain or loss
: What is the amount and character of the gain, loss or income that must be recognized by you as a result of the distribution of the SubCo stock?
|
|
Generate over the projects lifetime in british pounds
: Assume that Salisbury Corporation is considering the establishment of a subsidiary in England. The initial investment required by the parent is $40,000,000. If the project is undertaken, Salisbury would terminate the project after four years. Listed ..
|
|
Find an asymmetric equilibrium at which every buyer wins
: Can you find an equilibrium at which every buyer i wins with probability αi, for any collection of nonnegative numbers α1, α2,...,αn whose sum is 1?
|
|
Equation of the least squares regression line
: (a) Find an equation of the least squares regression line. (b) Based on the equation from part (a), what is the predicted final exam score if the average quiz score is 95?
|
|
Given as a reason for merger activity
: Which of the following is NOT given as a reason for merger activity in the U.S.?
|