Acquiring Corporation Acquires All of the Stock of Target Corporation

question 75

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

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Definitions:

Eldest Son

The firstborn male child in a family, often subject to specific rights, responsibilities, or inheritances in various cultures.

Inheritance

The practice of passing on property, titles, debts, rights, and obligations upon the death of an individual.

Castilian Monarchy

Refers to the monarchy of Castile, a significant kingdom in the Iberian Peninsula that played a central role in the unification of Spain and the Spanish Empire.

Cortes

A term that historically refers to the representative assemblies or parliaments in Spain and Portugal or their colonial territories.