Aurora Corporation exchanges $700,000 of its voting stock for all of Theda Corporations single class of stock owned entirely by Kyle. Kyles basis in his Theda stock was $400,000.

(1) Does this exchange satisfy the requirements for a Type B reorganization? In your answer, discuss the requirements for a Type B reorganization and whether they are satisfied in this case. (2) What gain, if any, do Aurora and Kyle recognize on the exchange? (3) What is Kyles basis in his Aurora stock? What is Auroras basis in its Theda stock?