Mars Corporation merges into Jupiter Corporation by exchanging all of its assets for 300,000 shares of Jupiter stock valued at $5 per share and $200,000 cash as part of a qualified reorganization. Wanda, the sole shareholder of Mars, surrenders her Mars stock (basis $800,000) and receives all of the Jupiter stock transferred to Mars plus the $200,000 cash. How does Wanda treat this transaction for tax purposes? (CH20)

Question options:

	Wanda recognizes no gain. Her Jupiter stock basis is $800,000.
	Wanda recognizes no gain. Her Jupiter stock basis is $600,000.
	Wanda recognizes a $200,000 gain and the basis of her Jupiter stock is $800,000