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Lisa owns all the stock in MDC Corporation. Lisa has a basis of $300,000 in the MDC stock, which currently has a fair market value

Lisa owns all the stock in MDC Corporation. Lisa has a basis of $300,000 in the MDC stock, which currently has a fair market value of $700,000. MDC is merged into AIM Corporation. Lisa receives AIM preferred stock worth $300,000 and common stock worth $400,000. Lisa recognizes a gain of:

a.$700,000.

b.$400,000.

c.$300,000.

d.$0

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