Acme Corporation Acquires Fisher Corporation's Assets in a Type a Reorganization

question 4

Multiple Choice

Acme Corporation acquires Fisher Corporation's assets in a Type A reorganization for $800,000 of Acme's nonvoting preferred stock and $200,000 (face amount and FMV) of securities. The assets have an adjusted basis of $600,000 and an FMV of $1,500,000. In addition, Acme Corporation assumes $500,000 of Fisher's liabilities. At the time of the transfer, Acme's E&P is $400,000. Fisher distributes the stock and securities to its sole shareholder Barbara for all of her Fisher stock. After the reorganization, Barbara owns 25% of Acme's stock. Barbara has an adjusted basis of $400,000 in her Fisher stock. Barbara's basis for her Acme securities is

• A)0)
• B)$200,000.
• C)$350,000.
• D)$400,000.

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Definitions:

Work Process

The sequence of activities or steps taken to achieve a particular end in a business environment.

Work Process

A sequence of tasks or activities that are carried out to achieve a particular outcome, often related to producing goods or providing services.

Related Group

A set of individuals or entities connected by common interests, goals, or characteristics, often used in the context of organizational departments or familial relations.

Create Value

The process of producing goods or services that have greater worth than the cost of inputs, resulting in a beneficial outcome for businesses or consumers.