Suppose Loss Corp acquired Gain Corp in a statutory merger a

Suppose Loss Corp. acquired Gain Corp. in a statutory merger, and the original shareholders of Loss Corp. ended up with more than 50 percent of the stock of the merged corporation. Thereafter, Loss Corp. executives informed you that they were thinking of selling some of the assets acquired from Gain Corp., and they expected there will be capital gains.

What do you advise the corporation, in order for it to minimize its federal income taxes?

Solution

Recommendation, verify the net value and accumulated depreciation in accounting books, and this use in deduction of the federal income tax.