38950081
Description
Flashcards by Kalie Carney, updated 10 months ago
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Created by Kalie Carney
10 months ago
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| Question | Answer |
| §338(g) election | An election by a corporate buyer of 80 percent or more of a corporation’s stock to treat the acquisition as an asset acquisition and not a stock acquisition. |
| §338(h)(10) election | A joint election by the corporate buyer and corporate seller of the stock of a subsidiary of the seller to treat the acquisition as a sale of the subsidiary’s assets by the seller to the buyer. |
| Adjusted tax basis | An asset’s carrying value for tax purposes at a given point in time, measured as the initial basis (for example, cost) plus capital improvements less depreciation or amortization. |
| Amount realized | The value of everything received by the seller in a transaction (cash, FMV of other property, and relief of liabilities) less selling costs. |
| Boot | Property given or received in an otherwise nontaxable transaction such as a like-kind exchange that may trigger gain to a party to the transaction. The term boot derives from a trading expression describing additional property a party to an exchange might throw in “to boot” to equalize the exchange. |
| Bright-line test | Technical rules found in the tax law that provide the taxpayer with objective tests to determine the tax consequences of a transaction. |
| Carryover basis | The basis of an asset the transferee takes in property received in a nontaxable exchange. The basis of the asset carries over from the transferor to the transferee. |
| Consolidations | The combining of the assets and liabilities of two or more corporations into a new entity. |
| Continuity of business enterprise (COBE) | A judicial (now regulatory) requirement that the acquiring corporation continue the target corporation’s historic business or continue to use a “significant” portion of the target corporation’s historic business assets to be tax-deferred. |
| Continuity of interest (COI) | A judicial (now regulatory) requirement that the transferors of stock in a reorganization collectively retain a continuing ownership (equity) interest in the target corporation’s assets or historic business to be tax-deferred. |
| Contribution to capital | A shareholder’s or other person’s contribution of cash or other property to a corporation without receipt of an additional equity interest in the corporation. |
| Mergers | The acquisition by one (acquiring) corporation of the assets and liabilities of another (target) corporation. No new entity is created in the transaction. |
| Person | An individual, trust, estate, partnership, association, company, or corporation. |
| Realization | Gain or loss that results from an exchange of property rights in a transaction. |
| Reorganization | A tax-deferred transaction (acquisition, disposition, recapitalization, or change of name or place of incorporation) that meets one of the seven statutory definitions found in §368(a)(1). |
| Stock-for-stock acquisitions | An exchange of solely voting stock by the acquiring corporation in exchange for stock of the target corporation, after which the acquiring corporation controls (owns 80 percent or more of) the target corporation. Often referred to as a “Type B reorganization.” |
| Substituted basis | The transfer of the tax basis of stock or other property given up in an exchange to stock or other property received in return. |
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