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corparation formation and re-organization


Bob and Betty have a partnership that owns 18 clothing stores located in various states in the US. They are thinking converting their business into a corporation and then using some money they have accumulated to acquire a small chain of men’s clothing stores located in Virginia or they might issue common stock from their new corporation to buy the other business.

Explain the tax consequences of forming the corporation from the partnership.

Explain the tax consequences of acquiring the chain of men’s clothing stores.


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