Burl Corporation Has Assets with a Value of $500,000 (Basis

question 95

Multiple Choice

Burl Corporation has assets with a value of $500,000 (basis of $300,000) and liabilities of $350,000.Wood Corporation is considering merging with Burl by exchanging 30% of its voting stock and $50,000 cash for Burl.

• A)This restructuring can qualify as a "Type A" merger only if Wood acquires all of Burl's assets and liabilities.
• B)This restructuring can qualify as a "Type B" only if Wood acquires substantially all of Burl's assets.
• C)This restructuring can qualify as a "Type C" only if Wood acquires none of Burl's liabilities.
• D)This restructuring cannot qualify as a tax-free reorganization for Burl because its liabilities are in excess of the basis of its assets.
• E)None of the above.

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