Abbey owns 100% of the stock of Target Corporation. Her adjusted basis in her Target stock is equal to $850,000. Target's assets are valued at $2,200,000 and have an adjusted basis in Target's hands of $1,000,000. Pursuant to a formal plan, Target transfers its assets to Acquiring Corporation a publicly traded company in exchange for $2,200,000 of Acquiring stock. The Acquiring Corporation stock represents less than 0.1 percent of its outstanding stock. Immediately after the transfer of its assets for the stock, and pursuant to the plan, Target Corporation is liquidated and the Acquiring Corporation stock is distributed to Abbey in the liquidation. (a) What are the tax consequences of the above on Target Corporation, Acquiring Corporation, Abbey and Acquiring Corporation's shareholders? (b) What would be the tax consequences to Target Corporation, Acquiring Corporation, Abbey and Acquiring Corporation's shareholders if Target Corporation was not liquidated? Abbey owns 100% of the stock of Target Corporation. Her adjusted basis in her Target stock is equal to $850,000. Target's assets are valued at $2,200,000 and have an adjusted basis in Target's hands of $1,000,000. Pursuant to a formal plan, Target transfers its assets to Acquiring Corporation a publicly traded company in exchange for $1,900,000 of Acquiring Corporation voting stock and $300,000 of cash. The Acquiring Corporation stock represents less than 0.1 percent of its outstanding stock. Immediately after the transfer of its assets for the stock and cash, and pursuant to the plan, Target Corporation is liquidated and the Acquiring Corporation stock and cash is distributed to Abbey in the liquidation. What are the tax consequences of the above on Target Corporation, Acquiring Corporation, Abbey. and Acquiring Corporation's shareholders