Burmese Corporation Is Interested in Acquiring Javanese Corporation by Transferring

Multiple Choice

Burmese Corporation is interested in acquiring Javanese Corporation by transferring 30% of its stock for all of Javanese's assets valued at $500,000 basis of $150,000) and its $200,000 of liabilities. Javanese has created $50,000 in general business research credits that it cannot use. Javanese concentrates on pharmaceutical research whereas Burmese manufactures sun glasses. Burmese uses a discount factor of 8%, and the Federal applicable rate is 4%. Javanese will terminate after the restructuring. How will this transaction be treated for tax purposes?

A) Since Javanese has liabilities in excess of its basis, this excess will be taxable to Javanese.
B) The most of the general business credits that Burmese can use in any year is $4,200.
C) This transaction could qualify as a "Type A" or a "Type C" reorganization.
D) All of these.
E) None of these.