Top Posters
Since Sunday
5
a
5
k
5
c
5
B
5
l
5
C
4
s
4
a
4
t
4
i
4
r
4
Home Q & A Board Other Fields Homework Help Business Accounting
New Topic  
Mandarini Mandarini
wrote...
Go to Answer
Posts: 1250
Rep: 0 0
7 years ago
Van owns all 1,000 shares of Valley Metal Corporation stock. The stock has a $100,000 FMV. Karen wants to purchase the stock from Van but has only $70,000. Valley Metal has ample cash, which is not needed for operations. Which of the following best qualifies for bootstrap redemption treatment and no constructive dividends to the purchaser?
A) Karen contracts to acquire all the stock of the corporation on an installment plan and then uses corporate funds to pay the installment obligations.
B) Karen buys 70 shares from Van for $70,000 and Van causes Valley Metal Corporation to redeem his remaining shares for $30,000.
C) Karen buys 70 shares from Van for $70,000 and then contracts to buy the remaining 30 shares from Van. She then causes Valley Metal Corporation to redeem Van's 30 shares.
D) Karen buys 70 shares from Van for $70,000 and obtains an option to purchase Van's remaining stock for $50,000. Karen then assigns the option to Valley Metal Corporation. The corporation subsequently exercises the option.
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
Authors:
Read 295 times
4 Replies
Replies
Answer verified by a subject expert
genflynngenflynn
wrote...
#1
Top Poster
Posts: 517
Rep: 13 0
7 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1
We have the most crude accounting tools. It's tragic because our accounts and our national arithmetic doesn't tell us the things that we need to know.

Related Topics

Mandarini Author
wrote...
#2
6 years ago
Thank you!!
wrote...
#3
3 years ago
thank you!
wrote...
#4
3 years ago
thank you
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1284 People Browsing
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 171
  
 1169
  
 261
Your Opinion
Which 'study break' activity do you find most distracting?
Votes: 741
Previous poll results: Who will win the 2024 president election?