Spoonbill Corporation Has Assets with a FMV of $800,000 and Adjusted

Multiple Choice

Spoonbill Corporation has assets with a FMV of $800,000 and adjusted basis of $600,000. It has been manufacturing engineering equipment and laboratory tools for the last 8 years. Spoonbill forms a new corporation, Roseate Corporation, by acquiring all of its stock in exchange for the laboratory tool division of Spoonbill. Each of the Spoonbill shareholders receives 1 share of Roseate stock for each 50 shares they own in Spoonbill. How will this transaction be treated for Federal income tax purposes?

A) As a split-off "Type D" reorganization.
B) As a spin-off "Type D" reorganization.
C) As a spit-up "Type D" reorganization.
D) This transaction is treated as a stock dividend.
E) None of the above.