$4$

$16\mathrm{.}66$ points

eBook.

Hint

Print

References

Required $A$

Required B

Required C$1$

Required $C2$

Ernesto was asking for $$518,350$ for the company. His tax basis in the BLI stock was $$122,000.$ Included in the sales price was an unrecognized customer list valued at $$162,000.$ The unallocated portion of the purchase price $($$$83,250)$ will be recorded as goodwill.

Note: Negative amounts should be indicated by a minus sign.

Required:

a$.$ What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate$-$level tax does BLI pay as a result of the transaction?

b$.$ What amount of gain or loss does Ernesto recognize if the transaction is structured as a direct asset sale to Amy and Brian, and BLI distributes the after$-$tax proceeds $[$computed in part $($a$)]$ to Ernesto in liquidation of his stock?

Note: Round intermediate calculations and final answer to the nearest whole dollar amount.

c$1.$ What are the tax benefits, if any, to Amy and Brian as a result of structuring the acquisition as a direct asset purchase?

c$2.$ What is the tax basis in the assets received by Amy and Brian?

Complete this question by entering your answers in the tabs below.

What amount of gain or loss does BLI recognize if the transaction is structured as a direct asset sale to Amy and Brian? What amount of corporate$-$level tax does BLI pay as a result of the transaction?

$\backslash$table$[[$Cash paid,,,$],[$Liabilities assumed,,,$],[$Amount realized,$$,0,],[$Adjusted Basis,,,$],[$Gain or Loss Recognized,$$,0,],[$Tax Rate,,,$\%$