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Questions: 1. Biome Startup, Inc. (BS) is dedicated to improving the worlds soil health...

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Accounting

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1. Biome Startup, Inc. (BS) is dedicated to improving the worlds 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 Farmers Co-op Corporation (Co-op) has just the plant its 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-ops basis in the plant is $20,000. On January 1, BS acquired 50% of Co-ops stock for $300,000 in cash. The fair market value of the plant on January 1 was $400,000. Co-ops 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-ops assets had not changed between January 1 and July 1. What are the tax consequences to BS, Co-op, Co-ops shareholders if P makes no 338 election?
2. How would these tax consequences be different if BS makes a 338 election?

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