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29 September, 08:49

Manx Corporation transfers 40% of its stock and $50,000 in cash to Somali Corporation for $500,000 of assets and all $200,000 of its liabilities. Somali exchanges the Manx stock, cash, and its remaining $100,000 of assets with its shareholders for all their Somali stock. After the exchange, Somali liquidates. The exchange qualifies as what type of transaction

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  1. 29 September, 11:22
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    Type A reorganization

    Explanation:

    A type A reorganization can be classified as a merger or a consolidation. It is a type of tax free reorganization, where the acquiring company includes stocks and cash to purchase the assets of the acquired company. This type of transactions occur in a consensual basis between the companies.
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