On June 30,Target Corporation Transfers All of Its Assets to Acquiring

On June 30,Target Corporation transfers all of its assets to Acquiring Corporation in exchange for 25% of its common voting stock.At the time of the reorganization,Target has assets valued at $1 million (basis of $600,000)and its earnings and profits account shows a deficit of $250,000.Acquiring's earnings and profits as of June 30 were $320,000.Due to the reorganization,Acquiring has an NOL for the current year of $80,000.Acquiring still declares its usual dividends of $100,000,paid on June 30 and December 30 ($200,000 of total dividends).