Acquiring Corporation Acquires All of the Stock of Target Corporation

question 34

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

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