Question

Thanks for your help!

37. Which of the following definitions of Sec. 338 property classes is not correct?

A) Class I: cash, demand deposits, and similar accounts in banks, savings and loan associations, etc.

B) Class II: actively traded personal property such as publicly traded securities

C) Class III: covenants not to compete, similar restrictions on trade, etc.

D) Class IV: inventory or other property held primarily for sale to customers

38. Navatek Corporation adopts a plan of reorganization and exchanges 1,500 shares of its voting stock and $75,000 in cash for Santos Corporation's assets having a $300,000 adjusted basis and a $375,000 FMV. Santos Corporation is subsequently liquidated. What is Navatek Corporation's basis in the assets acquired in the exchange?

A) $225,000

B) $250,000

C) $300,000

D) $375,000

Answer 1

Question 37

Option C) Class III: covenants not to compete, similar restrictions on trade, etc

Question 38

Option C $ 300,000 because basis of Navtek and Santos would be same

Hope this helps, if not please let know in comments. We expert here put lots of effort to give correct and quality answer to students. Please mark the answer as helpful for the efforts put, it will mean alot. Thanks