Winner Corporation, in the 35% tax bracket, acquires the bankrupt Loser Corporation in a "Type G" reorganization. The assets of Loser are valued at $250,000 (basis of $300,000), and its liabilities are $400,000. Loser holds business credits of $35,000, capital losses of $75,000, and an NOL of $175,000 that will be carried over to Winner. Loser uses $100,000 of its liquid assets to pay off its general creditors. Assuming that no special elections are made, compute Winner's basis in Loser's assets and the amount of tax benefit carryovers available to Winner.

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The Answer of Winner Corporation, in the 35% tax bracket, acquires the bankrupt Loser Corporation in a "Type G" reorganization. The assets of Loser are valued at $250,000 (basis of $300,000), and its liabilities are $400,000. Loser holds business credits of $35,000, capital losses of $75,000, and an NOL of $175,000 that will be carried over to Winner. Loser uses $100,000 of its liquid assets to pay off its general creditors. Assuming that no special elections are made, compute Winner's basis in Loser's assets and the amount of tax benefit carryovers available to Winner.

Winner Corporation, in the 35% Tax Bracket, Acquires the Bankrupt