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Section 338 Election and an Inventory Sale Zanzibar Corp., a C corporation, is part of...

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Accounting

Section 338 Election and an Inventory Sale Zanzibar Corp., a C corporation, is part of a consolidated group, with assets consisting of inventory with a pre-transaction tax basis of $800 and value of $10,000. Zanzibar also has $800 of liabilities. Megan Miles acquires 100% of Zanzibars outstanding stock for $9,200, and the parties make a Sec. 338(h)(10) election. Answer the following questions:

What is Zanzibar Corp.s adjusted grossed-up basis (AGUB)?

What is the inventorys allocated tax basis?

How much gain will be realized when the inventory is sold?

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