Need answers to all posted MCQ. No need for explanations. Only attempt if you will answer all posted questions.

34. Pursuant to a Type C reorganization, Alice exchanged 1,000 shares in Blades, Inc., with a basis of $11,000 and a fair market value of $9,000 for stock in Razors, Inc. worth $8,500 and cash of $1,000. Blades earnings and profits were substantial. Alice recognizes

a. dividend income of $1,000.

b. long-term capital loss of $1,500.

c. long-term capital gain of $1,000.

d. no gain or loss.

35. Trampolines, Inc. transfers all its assets to a new corporation, Trogs, Inc., in exchange for voting stock of Trogs, Inc. The shareholders of Trampolines, Inc. turn in their Trampolines, Inc. stock for all the shares of Trogs, Inc. There is a business purpose for the transaction, and Trogs, Inc. will use all of Trampolines, Inc. assets in the same business in which Trampolines, Inc. was engaged. The transaction meets the definition of

a. a Type C reorganization.

b. both a Type C and a Type D reorganization.

c. a Type C, D, and F reorganization.

d. a Type A, C, D, and F reorganization.

36. Ivory, Inc. acquires all the assets of Mammoth, Inc. If the consideration paid is as follows, which transaction qualifies as a Type C reorganization, assuming all other requirements are met to qualify as a reorganization under Code Section 368(a)(1)(C)?

a. Voting common stock of Ivory, Inc. worth $200,000 and the assumption of $800,000 of Mammoth Inc.s liabilities.

b. Voting convertible preferred stock of Ivory, Inc. with a fair market value of $550,000 and warrants with a fair market value of $450,000 to purchase stock in Ivory, Inc.s subsidiary.

c. Voting common stock in Ivory, Inc. with a fair market value of $750,000 and assumption of liabilities of Mammoth Inc. of $200,000, plus $50,000 in cash.

d. Nonvoting convertible preferred stock in Ivory, Inc. worth $500,000 and cash of $500,000.

37 . The acquiring corporation does not obtain the target corporations tax attributes in a

a. Type A reorganization.

b. Type B reorganization.

c. Code Section 332 liquidation.

d. The acquiring corporation obtains the targets tax attributes in all of the above.

38. Conway Corporation sells its entire business to Acquirer for total proceeds of S10,000. Conway Corporations basis in its business assets is $2,000. The determination of whether the gain is taxable as ordinary income or capital gain depends on:

a. the type of assets sold.

b. the nature of Conway Corporations business operations, that is, how it has used those assets.

c. the holding period for the assets.

d. all of the above.

39. Kim exchanges stock he owns in Cardinal Corporation for stock in Robin Corporation plus a bond worth $3,600 (principal amount of $3,000). The exchange is pursuant to a corporate reorganization of both corporations that meets all of the requirements to qualify as a reorganization under Code Section 368(a)(1). Kim paid $61,600 for the stock in Cardinal Corporation four years ago. The Robin Corporation stock is worth $60,000. Kim recognizes gain on the transaction of

a. $0.

b. $2,000.

c. $3,000.

d. $3,600.

40. In considering whether to do an A-type or a C-type reorganization, the Acquiring Corporation and the Targets stockholders should consider which of the following?

a. An A reorganization has a more generous provision for the use of boot.

b. An A reorganization may be less expensive and easier to document than a C-type.

c. A C reorganization enables the Acquiring Corporation to more easily cherry-pick assets and liabilities of the Target.

d. All of the above.

41. Holly, a shareholder in the acquired corporation in a transaction that qualified as a reorganization under Code Section 368(a)(1), turned in 100 shares of common stock of the acquired corporation with a basis of $4,200. In return Holly received voting convertible preferred stock of the acquirer corporation worth $4,700 and a debenture with a face value of $1,000 and a value of $850. As a result, Holly must recognize a gain of

a. $1,350.

b. $850.

c. $800.

d. $0.

42. Tom and Jack who are brothers each own 50 percent of the stock of Raiders, Inc. After a serious disagreement, they decide to divide the business in two. Raiders, Inc. therefore transfers half its assets to a new corporation, Doolittle, Inc., in exchange for the stock of Doolittle, Inc. and the other half of its assets to another new corporation, Minimum, Inc., also in exchange for the stock of Minimum, Inc. Both brothers turn in their Raiders, Inc. stock with one brother receiving all of the stock of Doolittle, Inc. and the other brother receiving all of the stock of Minimum, Inc. Raiders earnings and profits at the time were $1,000,000. This transaction can best be described as

a. two Section 351 transactions.

b. acquisitive Type D reorganization.

c. spin-off.

d. tax-free split-up.