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:

Isovolumetric Contraction

A phase in the cardiac cycle where the heart's ventricles contract with no change in volume because all valves are closed.

Myocardial Infarction

Commonly known as a heart attack, it occurs when blood flow to a part of the heart is blocked for a long enough time that part of the heart muscle is damaged or dies.

Left Coronary Artery (LCA)

A critical artery that supplies blood to the left side of the heart, including the left ventricle and left atrium.

Anterior Interventricular Branch

An artery that supplies blood to the front of the ventricles of the heart, often referred to as the left anterior descending artery (LAD).