The Long Corporation Has $500,000 of Assets (Basis of $350,000)

The Long Corporation has $500,000 of assets (basis of $350,000) and liabilities of $125,000. ShortCo acquires Long's assets and $100,000 of liabilities by exchanging $400,000 of its voting stock. Long distributes the ShortCo stock and remaining liabilities to its shareholder in exchange for her Long stock (basis of $275,000) and then it liquidates. Which, if any, of the following statements is correct?

A) This restructuring qualifies as a "Type A" reorganization with no recognized gains or losses.
B) This restructuring qualifies as a "Type C" reorganization with no recognized gains or losses.
C) This qualifies as either a "Type A" or "Type C" and the shareholder has a $25,000 recognized gain.
D) The restructuring is taxable because liabilities cannot be distributed to shareholders in a tax-free reorganization.
E) None of the above statements is correct.