Question 43 Pursuant to a plan of corporate reorganization, Pat exchanged 1,000 shares of Stream Corporation stock that she had purchased for $60,000, for 1,200 shares of Creek Corporation voting stock having a fair market value of $70,000, and $10,000 in cash. What is Pats recognized gain on the exchange, and what is her basis in the Creek Corporations stock? A. $10,000 gain; $60,000 basis. B. $10,000 gain; $70,000 basis. C. $20,000 gain; $60,000 basis. D. $20,000 gain; $70,000 basis.

Question 44 - Which of the following statements is true concerning all types of tax-free corporate reorganizations?

A. Assets are transferred from one corporation to another.

B. Stock is exchanged between the shareholders of at least two corporations.

C. Liabilities that are assumed when cash is also used as consideration will always be treated as boot.

D. None of the above statements is true.