Melon Corporation Makes Its First Purchase of 30% of Hill

question 6

Multiple Choice

Melon Corporation makes its first purchase of 30% of Hill Corporation stock on July 31 of this year. Melon Corporation uses a calendar tax year. To use the Sec. 338 election, Melon Corporation must purchase

• A) an additional 51% of Hill Corporation stock by December 31 of this year.
• B) an additional 50% of Hill Corporation stock by December 31 of this year.
• C) an additional 51% of Hill Corporation stock by July 30 of next year.
• D) an additional 50% of Hill Corporation stock by July 30 of next year.