WhydahCo Is Owned by Gilda and Her Four Nieces and Nephews

WhydahCo is owned by Gilda and her four nieces and nephews. Gilda owns all the WhydahCo voting stock and its $50,000 bond. She wants to relinquish control of the entity; accordingly, WhydahCo redeems all of Gilda's voting common stock and issues her its preferred stock . She also exchanges her bond for preferred. The nonvoting preferred shares owned by the nieces and nephew are exchanged for voting common stock. Which of the following statements is correct?

A) The exchange of a bond for preferred stock is taxable.
B) The exchange of common for preferred is not taxable but the exchange of preferred stock for common stock is taxable.
C) All of these transactions are taxable.
D) The transaction is not currently taxable; this is a "Type E" reorganization.
E) None of the above statements is correct.