In a Valid "C" Reorganization, Target Transfers Assets with a Basis

question 59

Multiple Choice

In a valid "C" reorganization, Target transfers assets with a basis of $1 million and a fair market value of $1.5 million and receives stock with a fair market value of $1.3 million and $200,000 boot.Target has no remaining assets.Target liquidates by transferring the stock and boot to its shareholders.The amount of gain Target must recognize is

• A)$0
• B)$200,000
• C)$500,000
• D)None of the above

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