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Bernard owns all of the stock of Target (FMV: $100; AB: $50). Target merges into...

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Accounting

Bernard owns all of the stock of Target (FMV: $100; AB: $50). Target merges into Acquiring in a qualifying section 368(a)(1)(A) reorganization. Bernard receives $90 worth of Acquiring stock and $10 of cash. What are the tax consequences to Bernard?

A Bernard recognizes $10 of gain. Bernard has a basis in the Acquiring stock of $60.

B Bernard recognizes $10 of gain. Bernard has a basis in the Acquiring stock of $50.

C Bernard recognizes $50 of gain. Bernard has a basis in the Acquiring stock of $90.

D Bernard recognizes $50 of gain. Bernard has a basis in the Acquiring stock of $100.

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