Jakub and Sylvia propose to have their corporation, Wolverine Universal (WU), acquire another corporation, EMU Inc., in a tax-deferred triangular merger using an acquisition subsidiary of WU. The sole shareholder of EMU, Edie Eagle, will receive $250,000 plus $150,000 of WU voting stock in the transaction.
a) Can the transaction be structured as a forward triangular merger? Explain why or why not.
b) Can the transaction be structured as a reverse triangular merger? Explain why or why not.