Allen Corporation plans to acquire all the stock in Taylor Corporation in a stock-for-stock exchange. Which of the following transactions will qualify as a Type B reorganization?
a. All of Taylor’s common stock is exchanged for $1 million of Allen voting preferred stock.
b. All of Taylor’s common stock is exchanged for $1 million of Allen voting common stock, and $500,000 face amount of Taylor bonds are exchanged for $500,000 face amount of Allen bonds. Both bonds are trading at their par values.
c. All of Taylor’s stock is exchanged for $750,000 of Allen voting common stock and $250,000 of Allen bonds.
d. All of Taylor’s stock is exchanged for $1 million of Allen voting common stock, and Taylor shareholders end up with less than 1% of Allen stock.
e. Ninety percent of Taylor’s stock is exchanged for $900,000 of Allen voting common stock. One shareholder who owns 10% of the Taylor stock exercises his right under state law to have his shares independently appraised and redeemed for cash by Taylor. He receives $100,000.
f. Assume the same facts as in Part d except the Allen stock is contributed to Allen-Sub Corporation. The Allen stock is exchanged by Allen-Sub for all the Taylor stock.