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

question 8

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) 50%
• B) 75%
• C) 80%
• D) 0%

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Definitions:

Defense Mechanisms

Unconscious psychological strategies used to cope with reality and maintain self-image by reducing feelings of anxiety, guilt, or conflicts.

Freud

Sigmund Freud was an Austrian neurologist known for founding psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often reflecting concerns about future events.

Weak Superego

A condition in which the part of a person's mind that checks impulses, commonly associated with moral guidance, is not strong or well-developed.