Andy and Bertha each has owned 50% of the stock of Wallet Corporation for many years. Andy's stock basis is $800 (FMV $1,000) and Bertha's stock basis is $1,200 (FMV $1,000). Wallet is engaged in two lines of business (and has been so engaged for the last five years, unless the facts specify otherwise): the manufacture and sale of electronic equipment (Electro division) and the manufacture and sale of air conditioners (Airco division). The assets of each division have a FMV of $1,000 and an adjusted basis of $500, no liabilities exist, and Wallet has E&P of $1,000.Assume that 100% of the stock of a corporation is worth the net value of its assets, and ignore calculation of tax owed by Wallet. Except where otherwise indicated, assume that the transactions are motivated by good corporate business purposes and that no shareholder plans to dispose of any stock received.What are the tax consequences to the parties in each of the following transactions.

Assume in a. that the business purpose was to protect Airco assets from Electro creditors?