Weaver Corporation Has Net Assets Valued at $800,000 and an NOL

question 15

Multiple Choice

Weaver Corporation has net assets valued at $800,000 and an NOL of $250,000. On September 30 of the current year, Weaver is acquired by Loom Corporation, a calendar year taxpayer, in a restructuring qualifying as a tax-free reorganization. Weaver shareholders receive 30% of Loom's shares in exchange for all of their Weaver stock. Assuming that the Federal long-term tax-exempt rate is 3%, what is the maximum amount of Weaver's NOL available to Loom in the current year?

• A) $250,000
• B) $62,500
• C) $24,000
• D) $7,500
• E) None of these

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Definitions:

Membrane Excitability

Membrane excitability refers to the ability of nerve and muscle cells to produce a rapid change in their membrane potential, crucial for the generation and propagation of electrical signals.

Electric Charges

Electric charges are the physical properties of particles that cause them to attract or repel each other, based on the principle that like charges repel and opposite charges attract.

Nerves

Bundles of fibers that transmit electrical impulses between the brain, spinal cord, and other parts of the body, facilitating communication and responses.

Electromyography (EMG)

The insertion of needles into selected skeletal muscles for the purpose of recording nerve conduction time in relation to muscle contraction.