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T Corporation and its wholly owned subsidiary, S Corporation each have actively conducted a trade or business for more than five years. P Corporation wishes

T Corporation and its wholly owned subsidiary, S Corporation each have actively conducted a trade or business for more than five years. P Corporation wishes to acquire T but is not interested in owning the business conducted by S. The assets of T (including its S stock) and S are highly appreciated, and the businesses operated by T and S are equal in value. Consider generally the tax consequences of the following alternative transactions.

(a) T sells its S stock to Buyer Corporation. T's shareholders then sell their T stock to P.

(b) Two years ago, P purchases all of T's stock from T's shareholders for cash and does not make as 338 election. In the current year, for a valid business purpose, T distributes its S stock to P and nine months later P sells the S stock to Buyer Corporation.

(c) Same as (b), above, except that P is an individual.

(d) Same as (b), above, except that P acquired all the stock of T in a tax-free Type B reorganization.

(e) Two years ago, P purchases 50% of the T stock from T's shareholders and Buyer Corporation ("B") purchases the remaining 50%. In the current year, T distributes all of its S stock to Buyer in exchange for all the T stock held by Buyer.

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