11. [LO 2] True or False? A corporation's assumption of shareholder liabilities will always constitute boot in a §351 transaction. Explain.
12. [LO 2] How does the tax treatment differ in cases where liabilities are assumed with a tax avoidance purpose versus where liabilities assumed exceed basis? When would this distinction cause a difference in the tax treatment of the transactions?
13. [LO 2] What is a carryover basis as it relates to property received by a corporation in a §351 transaction? What is the purpose of attaching a carryover basis to property received in a §351 transaction?
14. [LO 2] Under what circumstances does property received by a corporation in a §351 transaction not receive a carryover basis? What is the reason for this rule?
15. [LO 2] How does a corporation depreciate an asset received in a §351 transaction in which no gain or loss is recognized by the transferor of the property?
16. [LO 2] True or False? A shareholder receives the same tax consequences whether property is contributed to a corporation in a §351 transaction or as a capital contribution. Explain.
17. [LO 2] Why might a corporation prefer to characterize an instrument as debt rather than equity for tax purposes? Are the holders of the instrument indifferent as to its characterization for tax purposes?
18. [LO 2] Under what conditions is it advantageous for a shareholder to hold §1244 stock? Why did Congress bestow these tax benefits on holders of such stock?
19. [LO 3] Why does the acquiring corporation usually prefer to buy the target corporation's assets directly in an acquisition?
20. [LO 3] Why do the shareholders of the target corporation usually prefer to sell the stock of the target corporation to the acquiring corporation?