Need help with Tax Memo

Tax Memo FInstructions:
The memo should not exceed two pages and students should use the tax memo template
provided. However, the answer should be a full 2 pages (double spaced, times new roman
12pt., 1-inch margins) Do not repeat the question in the answer. Each memo must include
an explanation of the relevant code sections, regs and/or other relevant controlling
authority such as case law. Don’t just cite the rules or cases, explain them and their
application to the specific facts in the questions.
Questions:
1.
Biome Startup, Inc. (BS) is dedicated to improving the world’s soil health — one farm at
a time. BS implements AI technology in the science of soil management and crop production to
create a virtual assistant that is able to help farmers increase crop yields and quality. BS is
looking to acquire new plant facilities. BS learns that Farmer’s Co-op Corporation (Co-op) has
just the plant it’s looking for. The Co-op recently closed its operation when the agri-businesses
took over the market and Co-op no longer has any goodwill or going concern value. Co-op’s
basis in the plant is $20,000. On January 1, BS acquired 50% of Co-op’s stock for $300,000 in
cash. The fair market value of the plant on January 1 was $400,000. Co-op’s other assets at that
time had a basis of $50,000 and a fair market value of $200,000. On July 1, BS acquired the
remaining 50% of the Co-op stock for $300,000 in cash. The value of Co-op’s assets had not
changed between January 1 and July 1. What are the tax consequences to BS, Co-op, Co-op’s
shareholders if P makes no §338 election?
2.
How would these tax consequences be different if BS makes a §338 election?
Tax Research Memo
Sample Format
Your Firm
Your Town and State
Date
Relevant Facts
Specific Issues
Conclusions
Support