j s bachman owns 100 of legato corporation stock and has

/in /by

Staccato Corporation wishes to purchase, for cash, 80% of Legato stock from Mr. Bachman and then make a Sec. 338 election. Determine the following amounts resulting from the transaction and Sec. 338 election: Grossed-up basis (G), aggregated deemed sale price (ADSP), total gain (loss) recognized, tax liability, adjusted grossed-up basis (AGUB), basis of each asset after allocating the AGUB, and gain recognized by Mr. Bachman. Assume a 34% corporate tax rate, and determine the required amounts in each of the following independent situations.
a. Staccato pays $491,200 for the Legato stock.
b. Staccato pays $600,000 for the Legato stock.
c. Staccato pays $470,000 for the Legato stock.
d. Staccato pays $670,000 for the Legato stock.