please answer a, b and g questions only

1. Lemon Corporation has been engaged in the manufacture and sale of personal computer hardware equipment for ten years at two plants, one in Boston, Massachusetts and the other in San Jose, California. During this same period, Lemon also has operated at each location a separate research and development division, each of which had significant assets and goodwill. Lemon's common stock, the only class outstanding, is owned equally by Ms. Micro and Mr. Chips. In each of the following alternative transactions, consider whether the active trade or business requirement has been satisfied: (a) As a result of a shareholder dispute, Ms. Micro wishes to say goodbye to Mr. Chips. To enable the shareholders to part company but continue in the computer business, Lemon contributes the assets and research division of the Boston facility to a new corporation, Peach, Inc., and distributes all the Peach, Inc. stock to Mr. Chips in redemption of his Lemon stock. Ms. Micro remains as the sole shareholder of Lemon. (b) Same as (a), above, except that the Boston facility was opened only three years ago. (c) Same as (b), above, except that three years ago Lemon acquired all the stock of Peach, Inc., which operated the Boston facility, for cash. Assume that Lemon Corporation from Problem 1 at page 483, operates a computer manufacturing business at only one location where it also conducts research and development through a separate division. Lemon also owns all the stock of Floppy Disk, Inc., a computer software manufacturer that Lemon purchased six years ago in a taxable transaction. The net worths of the computer and software businesses are approximately the same, and both corporations have substantial accumulated earnings and profits. The common stock of Lemon is owned equally by Ms. Micro and Mr. Chips. In each of the following alternatives, assume that the active trade or business requirement is met and consider whether the transactions described satisfy the other requirements of Section 355 . (a) To resolve a shareholder dispute, Lemon distributes all the stock of Floppy Disk, Inc. to Mr. Chips in complete redemption of his stock in Lemon. (b) Same as (a), above, except that Ms. Micro and Mr. Chips are mother and son. (c) Same as (a), above, except that shortly before the distribution of Floppy Disk stock to Mr. Chips, Ms. Micro sold all of her Lemon stock to Mr. Modem, who wished to acquire the hardware business but not the software company. (d) To enable the computer manufacturing business to maintain different retirement plans for its manufacturing and research employees, Lemon transfers the assets of the research division to a new corporation, Research, Inc., and distributes all the Research stock pro rata to Ms. Micro and Mr. Chips. After the distribution, Research, Inc. continues to perform services solely for Lemon. (e) Same as (d), above, except that the purpose of the spin-off is to comply with a regulatory decree. (Compare your answer to Problem 1(e) at page 483.) (f) Same as (e), above, except that Lemon contributes cash and securities to Floppy Disk, Inc. before the distribution to Ms. Micro and Mr. Chips. After the contribution of cash and securities to Floppy Disk, Inc., the percentage of nonbusiness assets in Lemon Corporation is 10 percent and the percentage in Floppy Disk, Inc. is 40 percent. (g) To comply with a state law providing that computer hardware and software businesses may not be conducted by parent and subsidiary corporations, Lemon must spin off or sell its Floppy Disk, Inc. subsidiary. In anticipation of the new law, Lemon's board of directors informally negotiated a sale of Floppy Disk to Suitor, Inc. Before the agreement is reduced to an enforceable writing, Lemon distributes the Floppy Disk stock to Ms. Micro and Mr. Chips. Two months later, the shareholders sell the Floppy Disk stock to Suitor on the same terms negotiated by the Lemon board of directors