Claudio Corporation and Stellar Corporation both report on a calendar-year basis. Claudio merged into Stellar on June 30, 2014. Claudio had an allowable net operating loss carryover of $270,000. Stellar's taxable income for the year ended December 31, 2014, was $360,000 before consideration of Claudio's net operating loss carryover. Claudio's fair market value before the merger was $1,500,000. The federal long-term tax-exempt rate is 3%. As a result of the merger, Claudio's former shareholders own 10% of Stellar's outstanding stock. How much of Claudio's net operating loss carryover can be used to offset Stellar's 2014 taxable income?
a. $22,685
b. $45,000
c. $180,000
d. $180,984
Answer: A
Tax
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