Xian Corporation and Win Corporation would like to combine into one entity. Win redeems 90% of its common stock and all of its nonvoting preferred stock in exchange for 40% of Xian's common and 20% of its nonvoting preferred stock. Win then distributes the Xian stock to its shareholders. Win then becomes a subsidiary of Xian.
A) This is a taxable transaction.
B) This restructuring qualifies as a divisive "Type D" reorganization.
C) This restructuring qualifies as a "Type B" reorganization.
D) This restructuring qualifies as a "Type E" reorganization.
E) This restructuring qualifies as a "Type C" reorganization.

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The Answer of Xian Corporation and Win Corporation would like to combine into one entity. Win redeems 90% of its common stock and all of its nonvoting preferred stock in exchange for 40% of Xian's common and 20% of its nonvoting preferred stock. Win then distributes the Xian stock to its shareholders. Win then becomes a subsidiary of Xian.
A) This is a taxable transaction.
B) This restructuring qualifies as a divisive "Type D" reorganization.
C) This restructuring qualifies as a "Type B" reorganization.
D) This restructuring qualifies as a "Type E" reorganization.
E) This restructuring qualifies as a "Type C" reorganization.

Xian Corporation and Win Corporation Would Like to Combine into One