Answer the following question by filling each section down below.

6. Purple Corporation is acquiring Gray Corporation in a transaction that qualities as a $368 reorganization by exchanging $650,000 of stock and three parcels [(Parcel 1 FMV $350,000 - Basis $50,000); (Parcel 2 FMV $250,000 - Basis S100,000); (Parcel 3 FMV $400,00 - Basis $275,000 for all of Gray's assets (Stock-$450,000 and land (FMV of $500,000 and basis of $350,000) and liabilities of $175,000. Gray also has 200,000 of Earnings & Profits. Gray sells parcels1 & 2 for its FMV and uses proceeds to compensate employees who are losing their jobs. Gray then liquidates transferring parcel 3 and the stock received to its shareholders. What are the tax consequences of the reorganization to all parties (the acquiring corporation, the target corporation and the shareholders of Gray Corporation)? Acquiring Corp Target Corp Shareholders Stock L1 B L2 B L3 B S FMV Basis E&P Liab New Old 650K 350K $50K 250K SOOK 400K 275K 450K 500K 350K 200K 175K 650K(S) 400(L) 450K(S) Realize Gain Realize Gain Shareholders Realized Gain Recognize Gain Recognize Gain Shareholders Recognize Gain Basis Basis Basis Character of Gain to Target Character of Gain To Shareholder 6. Purple Corporation is acquiring Gray Corporation in a transaction that qualities as a $368 reorganization by exchanging $650,000 of stock and three parcels [(Parcel 1 FMV $350,000 - Basis $50,000); (Parcel 2 FMV $250,000 - Basis S100,000); (Parcel 3 FMV $400,00 - Basis $275,000 for all of Gray's assets (Stock-$450,000 and land (FMV of $500,000 and basis of $350,000) and liabilities of $175,000. Gray also has 200,000 of Earnings & Profits. Gray sells parcels1 & 2 for its FMV and uses proceeds to compensate employees who are losing their jobs. Gray then liquidates transferring parcel 3 and the stock received to its shareholders. What are the tax consequences of the reorganization to all parties (the acquiring corporation, the target corporation and the shareholders of Gray Corporation)? Acquiring Corp Target Corp Shareholders Stock L1 B L2 B L3 B S FMV Basis E&P Liab New Old 650K 350K $50K 250K SOOK 400K 275K 450K 500K 350K 200K 175K 650K(S) 400(L) 450K(S) Realize Gain Realize Gain Shareholders Realized Gain Recognize Gain Recognize Gain Shareholders Recognize Gain Basis Basis Basis Character of Gain to Target Character of Gain To Shareholder