Investment and Finance

A Stock Split is a division of outstanding shares of a corporation into a stated number of shares by which each outstanding share entitles its owner to a fixed number of new shares. In a reverse split, a stock owner receives less shares at a correspondingly higher price. In a forward split, a stock owner receives more shares at a correspondingly lower price. In both reverse and forward splits, the total equity number of shares multiplied by the stock price remains the same. An example of a two-for-one forward split, the owner of 200 shares, each worth $200, would be given 400 shares, each worth $100.

A Stop Order is an order to buy or sell a security as soon as the security's price hits a specific price level. Buy stop orders are placed above the market and sell stop orders are placed below it. The order becomes a market order if and when a transaction takes place at or through the stated stop price. A Buy Stop Order is an order that becomes a market order to buy if and when someone trades a round lot at or above the stop price. A Sell Stop Order is an order that becomes a market order to sell if and when someone trades a round lot at or below the stop price.

A Tender Offer is a formal proposition to stockholders to sell their shares in response to a large purchase bid. The buyer customarily agrees to assume all costs and reserves the right to accept all, or a specific number or none of the shares presented for acceptance.

Treasury Bonds are federal registered or bearer obligation issued in denominations of $500 to $1 million with maturities ranging from 5 to 35 years, carrying a fixed interest rate and issued, quoted and traded as a percentage of its face value.

A Underwriter is also known as an investment banker or distributor. He or she is a Middleman between an issuing corporation and the public. The underwriter usually forms an underwriting group, called a syndicate, to limit risk and commitment of capital. He or she may also contract with selling groups to help distribute the issue for a percentage. In the distribution of mutual funds, the underwriter is known as a sponsor or distributor, or even wholesaler. Investment bankers also offer other services, such as counsel and advice on the raising and investment of capital.

A loss is not deductible when incurred as a like kind exchange. A loss can only be deductible if you gave up unlike property as part of the exchange. The loss would be calculated as the amount equal to the excess of the adjusted basis of the unlike property over its fair market value at the date of the exchange. The loss would be reported on IRS Form 4797.

No. Business inventory or stock is considered property that does not fall with the IRS like kind tax free rules.
Generally, the other property that also does not fall into the like kind tax free rules are securities, notes, property held for personal purposes, foreign real estate, property held for sale and partnership interests.

An exchange of depreciable tangible personal property held for productive business or investment use may qualify for tax free treatment if it meets a "like kind" or "like class" test. The like class test includes 2 types. A general asset class and product classes.
An asset may only be classified within 1 asset class met to claim the like kind tax free treatment. The general asset classes may be found in the instructions for IRS Form 4562.
The product classes were designed under a coding system of the Standard Industrial Classification Manual. The manual assigns a 4 digit product class number.
Speak to your local CPA about the Standard Industrial Classification Manual or general asset classification for the like kind exchange tax strategies.

No. You cannot make a tax free "like kind" exchange of goodwill from one business to another.