Match the following items with the statements that follow. Terms may be used more than once.
-Green Corporation transfers 20% of its voting stock to Brown Corporation's shareholders in exchange for 60% of Brown's common stock and 90% of its preferred stock. Green acquired 30% of Brown's common stock three years ago in a taxable transaction. Brown becomes a subsidiary of Green.
A) Boot
B) Business credits
C) Capital gain
D) Continuity of business enterprise
E) Continuity of interest
F) Dividend
G) Discount rate
H) Earnings and profits
I) Federal long-term tax-exempt rate
J) Liability assumption
K) Ordinary gain
L) Ownership change
M) Section 382 limitation
N) Sound business purpose
O) Step transaction
Correct Answer:
Verified
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