# Solutions Chapter 7

CHAPTER 7

CORPORATIONS: REORGANIZATIONS

SOLUTIONS TO PROBLEM MATERIALS

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1LO 1IRS Letter RulingUnchanged1

2LO 1Reorganizations follow tax lawUnchanged2

3LO 1Types of reorganizationsUnchanged3

4LO 2Comparing like-kind exchange to corporateNew

reorganization

5LO 2Four-column templateUnchanged5

6LO 1, 2, 3Reorganization: tax attributes Unchanged6

7LO 3“Type A” merger “Type A” consolidationNew

8LO 3“Type B” reorganizationNew

9LO 3“Type A” and “Type C” reorganizationsUnchanged9

10LO 3“Type C” reorganizationsNew

11LO 3“Type D” reorganizationsUnchanged 11

12LO 3“Type E” reorganizationNew

13LO 3“Type F” reorganizationUnchanged 13

14LO 3“Type G” reorganizationUnchanged 14

15LO 4Judicial doctrinesUnchanged15

16LO 4Judicial doctrinesUnchanged16

17LO 3, 4“Type D” reorganizations and stepUnchanged17

transaction doctrine

18LO 5Exceptions to § 381 limitationNew

19LO 5Problematic assumptions of liabilitiesUnchanged 19

20LO 5Owner and equity shiftsUnchanged 20

21LO 5Formulas for § 382 limitationUnchanged21

22LO 5Excess credit § 382 limitation computationUnchanged22

23LO 5E & P carried to successorUnchanged23

24LO 5, 6Net present value of NOLUnchanged24

25LO 5, 6Net present value of business creditsUnchanged25

26LO 3Classify as to type of reorganization Unchanged26

27LO 2Gain taxable as stock redemptionUnchanged27

28LO 2Character of bondholder gainUnchanged28

29LO 2Reorganization gain, loss, and basis Unchanged29

determination

30LO 2, 3Stocks and bonds received in a “Type E”Unchanged30

reorganization

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31LO 2Gain recognition and basis computation Unchanged31

32LO 2Loss recognition and basis computationUnchanged32

33LO 2, 3Boot with liabilityUnchanged33

34LO 3Classify type of reorganizationUnchanged34

35LO 3, 6Structuring a “Type B” or “Type C”Unchanged35

reorganization

36LO 3, 6Comparison of “Type A”, “Type C,” andUnchanged36

acquisitive “Type D” reorganizations

37LO 3, 6“Type B” reorganizationUnchanged37

38LO 3, 6“Type C” reorganizationUnchanged38

39LO 3, 6“Type D” reorganizationUnchanged39

40LO 3Acquisitive “Type D” reorganizationUnchanged40

41LO 2, 3 “Type E” reorganizationUnchanged41

42LO 3“Type F” reorganizationUnchanged42

43LO 3“Type G” reorganizationUnchanged43

44LO 3, 4Sound business purpose and continuity ofUnchanged44

business

45LO 4Continuity of interest and step transactionUnchanged45

46LO 5Capital loss carryover and “Type B”Unchanged46

reorganization

47LO 5NOL change year when no § 382 limitationUnchanged47

48LO 3, 5NOL carryover and § 382 limitationUnchanged48

49LO 5“Type E” reorganization and net presentUnchanged49

value

50LO 5Carryover of NOL: net present valueUnchanged50

51LO 5Net present value of acquired NOLUnchanged51

52LO 5Carryover of capital loss and excess creditsUnchanged52

53LO 5Business credits and net present valueUnchanged53

54LO 5Stock valuation and net present valueUnchanged54

55LO 3Present value of D reorganizationUnchanged55

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1“Type B” reorganization with bond exchangeUnchanged1

2“Type G” reorganizationUnchanged2

3Reverse triangular “Type A” reorganizationUnchanged3

4Treatment of reorganization costsUnchanged4

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