QUESTION 26 Square Corporation wants to acquire or merge with Circle Corporation. Circle corporation has assets worth $100,000 and basis of $20,000. Circle Corporation has only one shareholder, Janice. Janice has a basis in her Circle Corporation stock of $60,000. Janice exchanges all of her stock in Circle Corporation to Square Corporation for $100,000 cash. As a result of the exchange, Janice recognizes gain of QUESTION 27 Chile Corporation exchanges all of its assets (value of $500,000, basis of $50,000) to Peru Corporation for Peru Corporation common voting stock (worth $500,000). Chile Corporation has only one shareholder, Bob. Bob has a basis in his Chile stock of $80,000. Chile Corporation distributes all Peru Corporation stock Gits only remaining asset) to Bob and dissolves (Chile Corporation had no debts). Chile Corporation recognizes gain of QUESTION 26 Square Corporation wants to acquire or merge with Circle Corporation. Circle corporation has assets worth $100,000 and basis of $20,000. Circle Corporation has only one shareholder, Janice. Janice has a basis in her Circle Corporation stock of $60,000. Janice exchanges all of her stock in Circle Corporation to Square Corporation for $100,000 cash. As a result of the exchange, Janice recognizes gain of QUESTION 27 Chile Corporation exchanges all of its assets (value of $500,000, basis of $50,000) to Peru Corporation for Peru Corporation common voting stock (worth $500,000). Chile Corporation has only one shareholder, Bob. Bob has a basis in his Chile stock of $80,000. Chile Corporation distributes all Peru Corporation stock Gits only remaining asset) to Bob and dissolves (Chile Corporation had no debts). Chile Corporation recognizes gain of