40. In considering whether to do an A-type or a C-type reorganization, the Acquiring Corporation and the

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40. In considering whether to do an A-type or a C-type reorganization, the Acquiring Corporation and the Target's stockholders should consider which of the following?

a. An "A" reorganization has a more generous provision for the use of boot.

b. An "A" reorganization may be less expensive and easier to document than a C-type.

c. A "C" reorganization enables the Acquiring Corporation to more easily cherry-pick assets and liabilities of the Target.

d. All of the above.

41. Holly, a shareholder in the acquired corporation in a transaction that qualified as a reorganization under Code Section 368(a)(1), turned in 100 shares of common stock of the acquired corporation with a basis of $4,200. In return Holly received voting convertible preferred stock of the acquirer corporation worth $4,700 and a debenture with a face value of $1,000 and a value of $850. As a result, Holly must recognize a gain of

a. $1,350.

b. $850.

c. $800.

d. $0.

42. Tom and Jack who are brothers each own 50 percent of the stock of Raiders, Inc. After a serious disagreement, they decide to divide the business in two. Raiders, Inc. therefore transfers half its assets to a new corporation, Doolittle, Inc., in exchange for the stock of Doolittle, Inc. and the other half of its assets to another new corporation, Minimum, Inc., also in exchange for the stock of Minimum, Inc. Both brothers turn in their Raiders, Inc. stock with one brother receiving all of the stock of Doolittle, Inc. and the other brother receiving all of the stock of Minimum, Inc. Raiders' earnings and profits at the time were $1,000,000. This transaction can best be described as

a. two Section 351 transactions.

b. acquisitive Type D reorganization.

c. spin-off.

d. tax-free split-up.

Please show solution or explanation.