Acquiring Corporation Acquires All of the Stock of Target Corporation

question 75

Multiple Choice

Acquiring Corporation acquires all of the stock of Target Corporation in a Type B (stock-for-stock) reorganization. Both corporations have always filed separate tax returns. Which one of the following statements regarding the acquisition is correct?

• A)Acquiring and Target Corporations can elect to file a consolidated tax return.
• B)Acquiring and Target Corporations must file a consolidated tax return.
• C)Acquiring Corporation assumes all of the tax attributes of Target Corporation.
• D)Acquiring Corporation must step up or step down the basis of the Target Corporation's assets to their FMV on the acquisition date.

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Definitions:

Sensory Information

Data received from the environment or the body, via sensory organs, that is processed by the nervous system to produce a response or perception.

Thalamus

A large mass of gray matter deeply situated in the forebrain at the topmost portion of the brainstem, functioning primarily as a central relay station for sensory impulses and as a center for pain perception.

Brain Stem

The posterior part of the brain, adjoining and structurally continuous with the spinal cord, responsible for basic vital life functions such as breathing and heartbeat.

Midbrain

A central part of the brainstem that plays an important role in vision, hearing, motor control, sleep/wake, arousal, and temperature regulation.