QUESTION 21 J owns all the stock of T Ts only asset is a thoroughbred racing track with an adjusted basis of $1,200,000 and a fair market value of $3,000,000 Js basis in the T stock is $1,000,000 P, a corporate developer of shopping malls wants to acquire the race track for a mall site P and J agree on a Type C reorganization, with T trading the race track for P stock worth $2,580,000 and $20,000 in cash and then liquidating P will give T some treasury shares P bought in the market for $2,000,000 Assume this will qualify as a good Type C reorganization to which T and P are parties to a reorganization a Upon Ts distribution of the P stock and cash to J, T recognizes no gain under Section 336(c) and Section 361(c) b Upon the distribution of the P stock and cash, T has recognized gain of $20,000 on the distribution of the boot c Upon the distribution of the P stock and cash, T has gain of $2,580,000 less $1,200,000 less $20,000 d None of the above QUESTION 22 J owns all the stock of T Ts only asset is a thoroughbred racing track with an adjusted basis of $1,200,000 and a fair market value of $3,000,000 Js basis in the T stock is $1,000,000 P, a corporate developer of shopping malls wants to acquire the race track for a mall site P and J agree on a Type C reorganization, with T trading the race track for P stock worth $2,580,000 and $20,000 in cash and then liquidating P will give T some treasury shares P bought in the market for $2,000,000 Assume this will qualify as a good Type C reorganization to which T and P are parties to a reorganization a Upon the distribution of the P stock and cash by T to J, J recognizes no gain due to Section 354 b Upon the distribution of P stock and cash by T to J, J recognizes gain of $20,000 Js basis in the P stock will still be $1,000,000 c Upon the distribution of P stock and cash by T to J, J recognizes $20,000 gain Js basis in the P stock will be $1,000,000 less $20,000 d None of the above

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QUESTION 21 J owns all the stock of T. Ts only asset is a thoroughbred racing track with an adjusted basis of $1,200,000 and a

QUESTION 21

J owns all the stock of T. Ts only asset is a thoroughbred racing track with an adjusted basis of $1,200,000 and a fair market value of $3,000,000. Js basis in the T stock is $1,000,000. P, a corporate developer of shopping malls wants to acquire the race track for a mall site. P and J agree on a Type C reorganization, with T trading the race track for P stock worth $2,580,000 and $20,000 in cash and then liquidating. P will give T some treasury shares P bought in the market for $2,000,000. Assume this will qualify as a good Type C reorganization to which T and P are parties to a reorganization.

	a.	Upon Ts distribution of the P stock and cash to J, T recognizes no gain under Section 336(c) and Section 361(c).
	b.	Upon the distribution of the P stock and cash, T has recognized gain of $20,000 on the distribution of the boot.
	c.	Upon the distribution of the P stock and cash, T has gain of $2,580,000 less $1,200,000 less $20,000.
	d.	None of the above.

QUESTION 22

	a.	Upon the distribution of the P stock and cash by T to J, J recognizes no gain due to Section 354.
	b.	Upon the distribution of P stock and cash by T to J, J recognizes gain of $20,000. Js basis in the P stock will still be $1,000,000.
	c.	Upon the distribution of P stock and cash by T to J, J recognizes $20,000 gain. Js basis in the P stock will be $1,000,000 less $20,000.
	d.	None of the above.