As part of a Type C reorganization, Tucson Corporation exchanges assets having a $170,000 FMV and a $230,000 adjusted basis for $150,000 of Reno Corporation voting common stock and Reno's assumption of $20,000 of Tucson's liabilities. Tucson liquidates, with its sole shareholder, Pat,

receiving the Reno stock in exchange for her Tucson stock having an adjusted basis of $80,000. Pat owns 77% (2,500 shares) of Reno's stock immediately after the reorganization.

a. What is the amount of Tucson's recognized gain or loss in the asset transfer? On the distribution of the stock?

Asset Transfer: ________

Distribution: _________

b. What is Reno's basis in the assets it receives?

c. What effect would the transfer of Tucson's assets to Subsidiary Corporation (controlled by Reno) have on the reorganization?

(Select one, for each bolded option)

no effect/yes it would have effect

a new gain or loss will be realized/No Gain or loss will be recognized on the asset transfer by Reno

The new/same basis of the assets and Tucson/Reno Corporation's attributes will carryover to Subsidiary

d. What are the amount and character of Pat's recognized gain or loss?

Amount: ________

Character: Capital Gain/Dividend/Return of Capital/NA (select one)

e. What is Pat's basis and holding period for her Reno stock?

The stock basis is $________

The holding period for Reno stock carries over from Tucson stock that Pat surrendered/is reduced to six months/is twelve months (select one)

f. What are the tax consequences of the transaction if Reno first transfers its stock to Reno-Sub Corporation, which then acquires Tucson's assets?

Transfer of Reno shares to Reno-Sub is treated as contribution to capital and thus is non taxable/contribution to capital and thus is taxable/as a Type D reorganization and thus is nontaxable/as a Type D reorganization and this is taxable

The result of a Triangular Type C reorganization would be different than/Triangular Type C reorganization would be the same as for/Type D reorganization would be different than/Type D reorganization would be the same as for a regular Type C reorganization outline above