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Crater Corporation Is Owned 70% by Lin Yuan and 30

question 65

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Crater Corporation is owned 70% by Lin Yuan and 30% by Yu Chi.Due to news articles damaging Crater's reputation,Lin and Yu decide to liquidate Crater,which has been in existence for eight years.They create Lunar and Solar corporations to receive all of the manufacturing assets of Crater.Lunar receives the night light manufacturing assets and Solar receives the heat lamp business.All of the Lunar stock and 40% of the Solar stock is given to Lin in exchange for her Crater stock.Yu receives the remaining 60% of Solar in exchange for his Crater stock.Crater then liquidates.Assuming all other requirements are met,these transactions qualify as:


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