Kiwi Corporation Would Like to Acquire Lemon Corporation on October

Kiwi Corporation would like to acquire Lemon Corporation on October 31 in a tax-free reorganization.While Kiwi is not interested in Lemon's line of business,Kiwi finds Lemon particularly appealing because Lemon has a $600,000 NOL and $20,000 capital loss carryover.Kiwi is a very profitable corporation and is also expecting to have at least $500,000 of capital gains for the current year.At the time of the restructuring,Lemon has assets valued at $3 million (basis of $3.3 million)and Kiwi could use most of these assets in its business.However,Kiwi would rather sell the assets,recognize the loss to offset its expected gains,and then use the proceeds to purchase new equipment.Kiwi is proposing exchanging 25% of its stock for all of Lemon's assets.The long-term tax-exempt rate is currently 6%,and Kiwi's discount factor for making investment decisions is 10%.
a.Discuss the proposed restructuring and what steps should be taken to maximize Kiwi's benefits from the reorganization.
b.What is the amount of Lemon's carryover loss that Kiwi may take in the current year assuming it meets all other tax law requirements? What are its loss carryovers to next year?