Question 1. One advantage of acquiring a corporation via an asset purch

1. One advantage of acquiring a corporation via an asset purchase instead of a stock purchase is that an asset

purchase avoids the transfer of the acquired corporation’s liabilities.

a. True

b. False

2. The Federal income tax treatment of a corporate restructuring is an extension of allowing entities to form without taxation.

a. True

b. False

3. Obtaining a positive letter ruling from the IRS can ensure the desired tax treatment for parties contemplating a corporate reorganization.

a. True

b. False

4. For corporate restructurings, meeting the § 368 reorganization “Type” requirements is all that needs to be considered

when planning the structure of the transaction.

a. True

b. False

5. Individual shareholders would prefer to have a gain on a corporate reorganization treated as a capital gain rather than as a dividend, because they can reduce the amount taxable by their basis in the stock involved.

a. True

b. False

6. For a corporate restructuring to qualify as a tax-free reorganization, the step transaction doctrine must apply.

a. True

b. False

7. The tax treatment of reorganizations almost parallels the Federal income tax treatment for like-kind exchanges.

a. True

b. False

8. Originally, the Supreme Court decided that corporate reorganizations were substantially continuations of the prior entities and thus should not be subject to taxation.

a. True

b. False

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