Mariano Owns All of Alpha Corporation, Which Owns 100% of Beta

question 83

Multiple Choice

Mariano owns all of Alpha Corporation, which owns 100% of Beta Corporation's single class of stock. On January 1, Alpha and Beta Corporations report a consolidated NOL carryover from prior years. What is the maximum percentage of Alpha Corporation's single class of stock that Mariano can sell to a single shareholder without triggering the Sec. 382 loss limitation?

• A)0%
• B)50%
• C)75%
• D)80%

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Definitions:

Essential Terms

The main conditions or stipulations that are crucial to the validity and execution of a contract or agreement.

Intention

An element of a valid contract; the parties must objectively intend for an agreement to be legally binding.

Reasonable Person

A hypothetical individual in the legal system who exercises average care, skill, and judgment in conduct and is used as a comparative standard for negligence.

Valid Contract

An agreement that is legally binding on both parties.