Match the following items with the statements that follow. Terms may be used more than once.
-Requires at least a 40% carryover ownership by target shareholders.
A)Boot
B)Business credits
C)Capital gain
D)Continuity of business enterprise
E)Continuity of interest
F)Dividend
G)Discount rate
H)Earnings and profits
I)Federal long-term tax-exempt rate
J)Liability assumption
K)Ordinary gain
L)Ownership change
M)Section 382 limitation
N)Sound business purpose
O)Step transaction

Question

Quizplus · Accepted Answer

E) Continuity of interest requires at least a 40% carryover ownership by target shareholders in a merger or acquisition to ensure that the transaction is not solely for tax avoidance purposes and maintains a substantial continuity of the target's business operations.

Match the Following Items with the Statements That Follow