Accounting help

maryksmith

Beth purchased 40% of Cerise Corporation for $350,000 six years ago. In the current year, Cerise consolidates with Pink Corporation, and Beth receives 10% of Cerise Pink stock valued at $500,000 and a $200,000 bond. At the time of the transaction, Cerise held E & P of $600,000 and Pink’s E & P was $1.2 million. How should Beth Treat this transaction for income tax purposes? What is Beth’s basis in her Cerise-Pink stock?

    • 12 years ago
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