During its taxation year ending December 31, 2020, all of the shares of Vick Ltd. are acquired by a new owner. The acquisition occurs on May 1, 2020 and, at that time, Vick has available a net capital loss of $175,000 [(1/2)($350,000)]. Also at that time the company has the following assets: For the period January 1, 2020 through April 30, 2020, the company has an operating loss of $143,000.
Advise the Company with respect to the most appropriate elections to be made prior to the acquisition of control and explain your results.

Question

During its taxation year ending December 31, 2020, all of the shares of Vick Ltd. are acquired by a new owner. The acquisition occurs on May 1, 2020 and, at that time, Vick has available a net capital loss of $175,000 [(1/2)($350,000)]. Also at that time the company has the following assets:  For the period January 1, 2020 through April 30, 2020, the company has an operating loss of $143,000.
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 During its taxation year ending December 31, 2020, all of the shares of Vick Ltd. are acquired by a new owner. The acquisition occurs on May 1, 2020 and, at that time, Vick has available a net capital loss of $175,000 [(1/2)($350,000)]. Also at that time the company has the following assets:  For the period January 1, 2020 through April 30, 2020, the company has an operating loss of $143,000.
Advise the Company with respect to the most appropriate elections to be made prior to the acquisition of control and explain your results.

During Its Taxation Year Ending December 31, 2020, All of the Shares