Ralph owns all the stock of Silver,Inc.,a C corporation for which his adjusted basis is $225,000.Ralph founded Silver 12 years ago.The assets and liabilities of Silver are as follows:

*Accumulated depreciation of $55,000 has been deducted.
Ralph and the purchaser,Marilyn,have agreed to a purchase price of $350,000 less any outstanding liabilities.They are both in the 35% tax bracket,and Silver is in the 34% tax bracket.
a.Advise Ralph on whether the form of the sales transaction should be a stock sale or an asset sale.
b.Advise Marilyn on whether the form of the purchase transaction should be a stock purchases or an asset purchase.

Question

Ralph owns all the stock of Silver,Inc.,a C corporation for which his adjusted basis is $225,000.Ralph founded Silver 12 years ago.The assets and liabilities of Silver are as follows:
  
*Accumulated depreciation of $55,000 has been deducted.
Ralph and the purchaser,Marilyn,have agreed to a purchase price of $350,000 less any outstanding liabilities.They are both in the 35% tax bracket,and Silver is in the 34% tax bracket. 
a.Advise Ralph on whether the form of the sales transaction should be a stock sale or an asset sale.
b.Advise Marilyn on whether the form of the purchase transaction should be a stock purchases or an asset purchase.

Quizplus · Accepted Answer

The Answer of Ralph owns all the stock of Silver,Inc.,a C corporation for which his adjusted basis is $225,000.Ralph founded Silver 12 years ago.The assets and liabilities of Silver are as follows:
  
*Accumulated depreciation of $55,000 has been deducted.
Ralph and the purchaser,Marilyn,have agreed to a purchase price of $350,000 less any outstanding liabilities.They are both in the 35% tax bracket,and Silver is in the 34% tax bracket. 
a.Advise Ralph on whether the form of the sales transaction should be a stock sale or an asset sale.
b.Advise Marilyn on whether the form of the purchase transaction should be a stock purchases or an asset purchase.

Ralph Owns All the Stock of Silver,Inc