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question 15...?
16.spin off-split off-split up
IMG 5527.PNG Photos 15. Zee Corp buys Emm Corp for $10,000. Emm has an NOL of s300,000 and the long term tax exempt bond rate is 5% on the day of the acquisition. In the first year (Y1 ) after the acquisition ZM, the combined corp has taxable income of $450 before deducting any net operating losses. In year 2 (Y2) the combined taxable income is $630 before deducting any available net operating losses. Give the regular taxable income (i.e. ignore alternative minimum tax) for both years Yl and Y2 and explain your answers. (4 points) 16. Name the three types of divisive D Reorganizations? 2:01 PMM O Type here to search 3/28/2018Explanation / Answer
Net operating losses ("NOL") are a tax credit created when a company's expenses exceed its revenues, generating negative taxable income as computed for tax purposes. NOL can be used to offset positive taxable income, reducing cash taxes payable. Acquired Emm Corp has NOL of $ 300000 that can be set off against future income for maximum 20 years. In Year 1, Taxable income is $ 450 before deducting any net operating loss. So, here NOL can be setted off and regular taxable income will be Nil In Year 2, Taxable income is $ 630 before deducting available any net operating loss. So, here NOL can be setted off and regular taxable income will be Nil
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