McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 12

Using the same facts in problem 47, assume Ernesto agrees to sell his stock in BLI to Amy and Brian for $400,000.
a. What amount of gain or loss does BLI recognize if the transaction is structured as a stock sale to Amy and Brian What amount of corporatelevel tax does BLI pay as a result of the transaction, assuming a tax rate of 34 percent
b. What amount of gain or loss does Ernesto recognize if the transaction is structured as a stock sale to Amy and Brian
c. What are the tax benefits, if any, to Amy and Brian as a result of structuring the acquisition as a stock sale