Static Controls Inc. has a December 31 year end. On May 1, 2020, all of the Company's shares are acquired by a new owner. For the period January 1, 2020 through April 30, 2020, the Company has an operating loss of $91,000.
On April 30, 2020, the Company has available a net capital loss carry forward of $125,000 [(1/2)($250,000)]. In addition, the Company has the following assets: Advise the Company with respect to the most appropriate elections to be made prior to the acquisition of control and explain your results.

Question

Static Controls Inc. has a December 31 year end. On May 1, 2020, all of the Company's shares are acquired by a new owner. For the period January 1, 2020 through April 30, 2020, the Company has an operating loss of $91,000.
On April 30, 2020, the Company has available a net capital loss carry forward of $125,000 [(1/2)($250,000)]. In addition, the Company has the following assets:  Advise the Company with respect to the most appropriate elections to be made prior to the acquisition of control and explain your results.

Quizplus · Accepted Answer

The Answer of Static Controls Inc. has a December 31 year end. On May 1, 2020, all of the Company's shares are acquired by a new owner. For the period January 1, 2020 through April 30, 2020, the Company has an operating loss of $91,000.
On April 30, 2020, the Company has available a net capital loss carry forward of $125,000 [(1/2)($250,000)]. In addition, the Company has the following assets:  Advise the Company with respect to the most appropriate elections to be made prior to the acquisition of control and explain your results.