Long Corporation Has $500,000 of Assets with a Basis of $350,000

question 78

Multiple Choice

Long Corporation has $500,000 of assets with a basis of $350,000 and liabilities of $125,000. ShortCo acquires Long's assets and $100,000 of liabilities by exchanging $400,000 of its voting stock. Long distributes the ShortCo stock and remaining liabilities to its shareholder in exchange for the shareholder's Long stock with a basis of $275,000 and then it liquidates. Which, if any, of the following statements is correct?

• A) This restructuring qualifies as a "Type A" reorganization with no recognized gains or losses.
• B) This restructuring qualifies as a "Type C" reorganization with no recognized gains or losses.
• C) This qualifies as either a "Type A" or "Type C" and the shareholder has a $25,000 recognized gain.
• D) The restructuring is taxable because liabilities cannot be distributed to shareholders in a tax-free reorganization.
• E) None of these statements is correct.

Recognize the importance of social relationships in personal development and societal integration.

Grasp the conceptual differences between adult and adolescent moral and social reasoning.

Understand the variability and determinants of productivity across different ages.

Grasp the biological and psychological aspects of aging, including menopause and cognitive changes.

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Definitions:

Reuptake

A process by which neurotransmitters are absorbed back into the nerve cell after being released into the synaptic cleft.

Polarization

A process by which differences between opposing viewpoints or factions become more extreme, leading to increased conflict and division.

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's "fight or flight" response during stress.

Fight-or-Flight

A physiological reaction that occurs in response to a perceived harmful event, attack, or threat to survival, preparing the body for either confrontation or avoidance.