Acquiring Corporation Transfers $1 Million of Its Voting Common Stock

question 81

Multiple Choice

Acquiring Corporation transfers $1 million of its voting common stock and $100,000 cash to Target Corporation in exchange for 90% of Target's assets. The assets retained by Target are used to settle its liabilities. Target then distributes the Acquiring stock and cash received to its shareholders in exchange for all their Target shares. Target then liquidates. This restructuring qualifies as a:

• A) "Type A" reorganization.
• B) "Type B" reorganization.
• C) "Type C" reorganization.
• D) "Type D" reorganization.
• E) Taxable exchange.

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Definitions:

Personal Representative

An individual appointed to manage the estate of a deceased person during probate, sometimes known as an executor.

Testator

An individual who has made a will or given a testament, especially as it pertains to the disposition of their property after death.

Attestation

The act of witnessing or affirming the truth of a document or event often through a formal declaration or certification.

Valid Will

A legally recognized document in which an individual outlines how their property should be distributed upon their death.