Gray Corporation Had Net Assets with a Fair Market Value

question 7

Multiple Choice

Gray Corporation had net assets with a fair market value of $4 million and an NOL carryforward of $3.0 million.Last year, Gray's shareholders received 40% of Sunset stock in a transaction qualifying as a reorganization.The long-term tax-exempt rate at that time was 9%.What is the maximum amount of Gray's NOL available to offset Sunset's $2,000,000 income for the current year?

• A)$0.
• B)$360,000.
• C)$750,000.
• D)$2,000,000.
• E)None of the above.

---

Definitions:

Delegation

The process where a manager or leader assigns tasks and responsibilities to subordinates.

Delegatees

Individuals who are assigned or delegated tasks, responsibilities, or authority by someone else.

Completion

The act of finishing or bringing something to an end or final stage, achieving all its required or planned elements.

Empowerment

The process of becoming stronger and more confident, especially in controlling one's life and claiming one's rights.