Jupiter Corporation Acquires All of Titian Corporation's Stock in Exchange

Multiple Choice

Jupiter Corporation acquires all of Titian Corporation's stock in exchange for its voting stock.Iris received 1,000 shares of Jupiter valued at $50,000 for her 8,000 shares of Titian that cost Iris $100,000 five years ago.In addition to the Jupiter stock,she receives a $30,000 bond.How does Iris treat this transaction for tax purposes?

A) Iris recognizes a loss of $50,000.Her Jupiter stock basis is $50,000.
B) Iris recognizes a loss of $20,000.Her Jupiter stock basis is $80,000.
C) Iris recognizes a $20,000 loss and a $25,000 gain.Her Jupiter stock basis is $105,000.
D) Iris realizes a $20,000 loss that is not recognized.Her Jupiter stock basis is $120,000.
E) None of the above.