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7
Corporate Reorganizations
Solutions to Tax Research Problems
TAX RESEARCH PROBLEMS

7-53 Stable Corporation will have a difficult, but not impossible, time arguing that the transaction is a
reorganization.
5- Section 368(a)(1)(B) states that “the acquisition by one corporation, in exchange solely for all or a part
of its voting stock … [for] stock of another corporation if … acquiring corporation has control of such
other corporation” is a reorganization. The effect of cash on the exchange has been considered in several
important cases. The most recent case was the ITT-Hartford merger which involved cash purchases in 1969
with the acquisition of control solely for stock in 1970.
5- Initially, the Tax Court and District Court ruled that the ITT-Hartford transaction was a valid
reorganization because control was acquired solely for stock. (This is the same as the Stable-Glamour
transaction.) However, on appeal both the 1st and 3rd Circuit Courts of Appeals reversed this decision.
(See Chapman 45 AFTR 2d 80-1290 and Heverly 45 AFTR 2d 80-1122.) The Courts reasoning was based
on the legislative history of the Section and the fact that the word “solely” provides no leeway.
5- At the appellate level, taxpayers devised a second argument. They contended that the 1969 purchases
were unrelated to the 1970 reorganization and therefore, the reorganization transaction was solely for voting
stock. Although not specifically cited, this argument is based on the example in Reg. § 1.368-2(c). In this
example A purchased 30 percent of W in 1939. In 1954, A acquired 60 percent of W solely for voting stock.
The regulation concludes that the 1954 transaction is a non-taxable reorganization. The underlying argument
is that the 1939 purchase was unrelated to the 1954 reorganization. The Court of Appeals recognized that if
the 1969 purchase was separate from the 1970 transaction, then the 1970 exchange was a valid reorganization.
The case was remanded to the lower court for determination of this factual question.
5- Based on the above, Glamour will have to prove that the cash purchases were not part of the
reorganization. The fact that the reorganization plan was developed after the IRS audit, whereas the cash
purchases were before the audit, should help Glamour. Because the question is one of fact, the final
decision is uncertain.
7-54 Assuming that Jim’s basis in T Corporations stock is $360,000 or less, Jim’s realized gain will exceed
$40,000, and therefore the entire $40,000 cash will be taxable. Since Jim is surrendering his T stock in the
transaction, the character of the gain will be governed by § 356(a)(2), which provides that the gain will be
capital except if the distribution is the equivalent of a dividend.
5- In Rev. Rul. 74-516, 1974-2 CB 121, the IRS addresses the correct approach to § 356(a)(2) in split-offs
and split-ups. It concludes that boot should be treated as distributed by the distributing corporation in
redemption of its own stock before the tax-free distribution under § 355. The character of the gain is
determined by applying the rules of § 302 to the ownership of the distributing corporation before and after
this hypothetical distribution.
7-1
7-2 Chapter 7 Corporate Reorganizations
5- In Clark 89-1 USTC {9230, 63 AFTR2d, 89-860, 109 S. Ct. 1455, the Supreme Court decided that in
an acquisitive reorganization the boot should be considered a distribution in redemption after the tax-free
reorganization. The case did not address § 355 transactions. Therefore, it is uncertain whether Rev. Rul.
74-516 is still a valid precedent. However, in PLR 9043007, July 31, 1990, the Service concluded that Rev.
Rul. 74-516 was still applicable to § 355 even after the Clark decision. After the hypothetical redemption of
Rev. Rul. 74-516, Jim owns 43.75 percent (140,000/320,000) of T Corporation. Since this is not less than
80 percent of his former ownership, Jim does not qualify under § 302(b)(2). Therefore, to receive capital
gain, Jim would have to argue that this is a meaningful reduction in interest under § 302(b)(1) based on
Davis, 70-1 USTC {9289, 25 AFTR2d, 70-287, 397 U.S. 301. It is likely that he will be successful.
7
Test Bank
True or False
1. It is sufficient to meet just one of the acceptable reorganizational patterns to obtain non-recognition
treatment.
2. The continuity-of-interest doctrine is designed to prevent sales from being treated as nontaxable
reorganizations.
3. To meet the “continuity of business enterprise” requirement, the acquiring corporation must continue
the target corporation’s historic business.
4. The combination of two corporations, pursuant to state law, to form a third corporation, is called a
merger.
5. In a “B” reorganization, only voting stock of the acquiring corporation (or its parent) may be used to
acquire the target corporation.
6. A nontaxable triangular “B” reorganization can be achieved provided that solely voting stock of the
acquiring corporation’s parent corporation is used.
7. In a “C” reorganization, the result is a parent-subsidiary group.
8. Following the transfer of assets, the target company must liquidate in order for there to be a valid “C”
reorganization.
9. As part of a “C” reorganization, the target corporation must liquidate by distributing solely the stock
and securities of the acquiring corporation.
10. In a “C” reorganization, the courts have held that as long as the target corporation transfers
substantially all the assets to the acquiring corporation, target is permitted to keep assets that formerly
had been essential to the active conduct of its trade or business.
11. In a “C” reorganization, the assumption of target corporation’s liabilities by the acquiring corporation
can be ignored as long as boot in the form of cash or property does not exceed 20 percent of the fair
market value of the assets transferred.
12. It is possible for a reorganization transaction to meet the definition of both a “C” and the acquisitive
“D” reorganization.
7-3
13. A “D” reorganization can be either acquisitive or divisive.
14. Both “E” and “F” reorganizations are examples of reorganizations that involve only one corporation.
15. In order for a reorganization to be given non-recognition treatment, a plan of reorganization must be
adopted by at least one of the corporations involved in the transaction.
16. The shareholders of target and acquiring corporations engaged in nontaxable reorganizations are not
parties to the reorganization themselves, and may be subject to taxation.
17. The basis of the property transferred to the acquiring corporation is equal to the target corporation’s
basis plus any gain recognized by the target on the transfer.
18. Target Corporation generally must recognize gain or loss on receipt of stock, securities, and boot in
an acquisitive reorganization.
19. In a “C” or acquisitive “D” reorganization, the target corporation is required to recognize gain or loss
on all stock, securities, boot, or assets distributed to shareholders.
20. As long as the business of the target corporation is continued, the full amount of target corporation’s
NOL will survive in a reorganization.
21. P Corporation owns 100 percent of R Corporation. P operates a car dealership while R owns a chain of
quick-lube franchises. P established R 10 years ago but now finds it advisable to narrow its business focus.
P distributes all of its shares in R to its shareholders. The distribution is a taxable dividend distribution.
22. A split-off occurs when the parent corporation distributes the stock of a subsidiary to stockholders
who do not surrender any of their stock in the parent for stock in the subsidiary.
23. A split-up occurs when a parent corporation distributes the stock of two or more subsidiary
corporations to its shareholders in exchange for all of their stock in the parent as part of a complete
liquidation of the parent.
24. L Corporation transferred $100,000 cash and bonds to a subsidiary in exchange for all of its stock,
which it distributed to its shareholders. The distribution is a nontaxable spin-off.
25. R received $1,000 cash in addition to stock in a transaction that meets the requirements of § 355. If
the transaction is a spin-off, R’s basis for his stock will increase by $1,000.
26. A distributing corporation distributes solely stock or securities of a controlled corporation. Gain or
loss is recognized by the distributing corporation.
Multiple Choice
27. Which one of the following statements concerning the requirements for a nontaxable reorganization is
false?
a. The reorganization must meet regulations concerning either “continuity of interest” or “continuity
of business enterprise.”
b. The reorganization must conform to one of several qualifying patterns.
c. The transaction must have a business purpose.
d. There must be a plan of reorganization that is adopted by each corporation involved in the transaction.
28. Which one of the following statements concerning the “continuity of interest” doctrine is true?
a. The target corporation’s shareholders can only receive stock.
b. According to the Code, at least 50 percent of the consideration received by the target
corporation’s shareholders as a group must be stock of the acquiring corporation.
c. The target corporation’s shareholders can dispose of the acquiring corporation’s stock
immediately after the transaction, provided it was not a prearranged disposition.
d. All of the above statements are false.
Test Bank 7-5
29. Which one of the following statements concerning the “continuity of business enterprise” doctrine is
true?
a. The acquiring corporation must continue all of the acquired corporation’s lines of business to
qualify as continuing the business.
b. The acquiring corporation may not sell any of the target corporation’s assets to qualify as using
target’s assets in a business.
c. As long as the acquiring corporation uses a significant portion of target’s assets in a business, it is
immaterial that they are used in a different manner than target used them.
30. Control of the target corporation must be obtained in all reorganizations in order to avoid recognizing
income. In reorganizations other than a type “D,” what constitutes “control” following a
reorganization?
a. Owning 80 percent or more of voting stock and 80 percent or more of nonvoting stock
b. Owning 50 percent of all assets
c. Owning 80 percent of total stock
d. All of the above answers are false.
31. Generally, which one of the following is not a valid “A” reorganization?
a. The combination of X and Y to form Z
b. The merger of S, a subsidiary of P, with K, using solely voting stock of S and P
c. The merger of L into N, followed immediately by a transfer of L’s assets to new corporation S, a
subsidiary of N
d. The merger of S, a subsidiary of P, into T, using P stock to acquire control of T, resulting in T
becoming a subsidiary of P
32. Which one of the following statements is not a step in an “A” reorganization by statutory merger?
a. Target corporation transfers its assets and liabilities to acquiring corporation in exchange for part
of acquiring corporation’s stock.
b. Target exchanges acquiring stock received for part of shareholders’ target stock.
c. Target corporation shareholders become shareholders in acquiring corporation.
d. Target dissolves.
33. Which one of the following statements about “B” reorganizations is true?
a. Solely voting stock must be used.
b. The result is always a parent-subsidiary group.
c. Stock of a corporation controlling the acquirer may be used in the transaction.
d. All of the above statements are true.
34. Which one of the following statements concerning a reverse triangular merger is false?
a. Subsidiary corporation is merged into target corporation.
b. Voting stock of parent corporation is given to shareholders of target corporation in return for all
of target’s assets.
c. Parent corporation must obtain at least 80 percent of voting and at least 80 percent of nonvoting
stock of the target corporation.
35. Which one of the following statements about a “B” reorganization is true?
a. The transferee must acquire control in the reorganization.
b. If the transferee purchases stock of the target corporation, it will never qualify for a “B”
reorganization.
c. A “B” reorganization results in only one surviving corporation.
36. Which one of the following statements concerning a creeping “B” reorganization is true?
a. An overall plan is required.
b. The period of time for acquisition to be carried out is limited to five years.
c. The acquisition may be made for cash as well as voting stock.
d. Any prior cash purchase will invalidate the reorganization.
37. X Corporation, which desires to obtain operations of Z Corporation, reorganizes by issuing voting
stock equal to 35 percent of its total outstanding stock in exchange for all the assets of Z Corporation.
Z Corporation then liquidates, distributing stock of X Corporation to its shareholders in exchange for
their stock in Z. This would be referred to as
a. An “A” reorganization
b. A divisive “D” reorganization
c. A “C” reorganization
d. A “B” reorganization
38. Which one of the following statements concerning a “C” reorganization is true?
a. Target’s shareholders normally must approve the sale of assets and liquidation.
b. Acquiring corporation shareholders need not formally approve the acquisition.
c. “C” reorganization is sometimes called the “practical merger.”
39. Which one of the following situations does not qualify as a “C” reorganization?
a. R Corporation acquires assets of M Corporation for voting stock of R Corporation. Following
the reorganization, R Corporation transfers the assets received from M Corporation to a newly
formed subsidiary in a § 351 transaction.
b. Q Corporation transfers assets with a fair market value of $200,000 to W Corporation for voting
stock of W Corporation. W assumes $40,000 of Q Corporation’s liabilities.
c. Same as b, but W also transfers $2,000 cash boot to Q Corporation.
d. All of the above are valid “C” reorganizations.
40. Which one of the following statements concerning the split-off type of divisive “D” reorganization is
true?
a. Shareholders do not surrender ownership in the original corporation for the subsidiary’s stock,
retaining the same interest in the original corporation.
b. Two corporations are held by the original shareholders but in different proportions than they held
in the original corporation.
c. Two new corporations are created.
41. Which one of the following statements is not a requirement for a divisive “D” reorganization?
a. Pro rata distribution of stock.
b. Active business requirement for both the original and controlled corporation.
c. The distribution cannot be a device to distribute earnings.
d. All of the above statements are required.
42. Which one of the following situations satisfies the requirements for a divisive “D” reorganization
pursuant to Code § 355?
a. ABC Corporation transfers excess accumulated cash to S, a newly created subsidiary, and
distributes S stock to its shareholders. Shareholders liquidate S and report capital gains for
liquidation.
b. Y Corporation transfers land to new corporation Z. Some of the land will be held for future
appreciation, and the remainder will be leased back to Y.
c. X Corporation transfers an active business to Z Corporation in exchange for all of Z’s stock. Z
stock is then distributed to individual J in exchange for all her X stock. X remains engaged in the
active conduct of other businesses it did not transfer to Z.
d. All of the above
43. Which one of the following exchanges will not qualify as a tax-free reorganization in an “E”
recapitalization?
a. Stock for stock
b. Bonds for stock
c. Stock for bonds
d. Bonds for bonds
Test Bank 7-7
44. Which one of the following situations could not qualify as an “E” reorganization?
a. Exchange of a shareholder’s common stock for nonvoting, nonparticipating preferred stock in the
same corporation.
b. Exchange of all of W corporation’s stock for stock of Q, a wholly owned subsidiary of W.
c. XYZ agrees to exchange one share of participating cumulative preferred stock for each share of
common stock currently outstanding.
d. All of the above
45. S and J, Inc. decided to change its name to SJ Company. What type of reorganization is this?
a. Just changing a corporate name is not a reorganization.
b. “G” reorganization
c. “F” reorganization
d. “D” reorganization
46. As part of a “C” reorganization, T Corporation transfers assets with a basis of $200,000 and a fair
market value of $500,000. T receives stock of A Corporation worth $400,000 and $100,000 worth of
other property with a basis to A of $75,000. What is the basis of the property transferred to A?
a. $400,000
b. $75,000
c. $200,000
d. $100,000
47. In a statutory merger, P Corporation transfers assets worth $250,000 (basis $200,000) in exchange for
M Corporation’s stock worth $250,000. What is M Corporation’s basis in the assets?
a. $250,000
b. $200,000
c. $50,000
d. None of the above
48. In a valid “C” reorganization, Target transfers assets with a basis of $1 million and a fair market
value of $1.5 million and receives stock with a fair market value of $1.3 million and $200,000 boot.
Target has no remaining assets. Target liquidates by transferring the stock and boot to its
shareholders. The amount of gain Target must recognize is
a. $0
b. $200,000
c. $500,000
49. As part of a “C” reorganization, T Corporation transfers assets with a basis of $300,000 and a fair
market value of $500,000. T receives stock of A Corporation worth $400,000 and $100,000 worth of
other property with a basis to A of $75,000. What is the basis of the other property received by T
Corporation as part of the consideration from A Corporation?
a. $75,000
b. $100,000
c. $300,000
d. $200,000
50. In a “C” reorganization, Target Corporation transferred all of its assets except land to Acquiring
Corporation. The land was worth $600,000 (basis $520,000). The transferred assets were worth $20
million and had a basis of $16 million in the hands of Target. In exchange, Target received stock of
Acquiring worth $19.4 million, cash of $200,000, and an office building worth $400,000 (basis to
Acquiring was $260,000). Target liquidates, subject to the rules of § 361. How much gain must Target
recognize?
a. None
b. $80,000 on land
c. $140,000 on office building
d. $600,000 on the assets received
e. $600,000 on the assets received and $80,000 on the land distributed
51. X, as part of a reorganization, exchanges a security with a principal amount of $2,000 and a fair
market value of $2,100, for a security with a principal amount of $2,500 and a fair market value of
$2,800. The amount of boot X received is
a. $0
b. $100
c. $500
d. $560
e. $700
52. As part of a plan of reorganization, S received the following assets in exchange for a share of stock
with a $75 basis:
One share of stock worth $50

Cash $20
What is S’s recognized gain or loss on this exchange?

a. $25 loss
b. $20 gain
c. $5 loss
d. No gain or loss is recognized.
53. Which of the following statements is true?
a. In an “A” reorganization, the surviving corporation can use all of the acquired corporation’s
NOL without limitation.
b. In a “C” reorganization, the target corporation’s E&P disappears.
c. In a “B” reorganization, the acquiring corporation inherits the target corporation’s tax attributes.
54. In which types of reorganization do tax attributes not transfer to the acquiring corporation?
a. “A” and “C” reorganizations
b. “B” and divisive “D” reorganizations
c. Acquisitive “D,” “F,” and “G” reorganizations
55. Which one of the following statements regarding E&P carryover is false?
a. E&P of target corporation only is considered.
b. The loss corporation’s deficit in E&P may be used to offset the E&P of the profitable corporation.
c. A deficit in E&P can be used to offset E&P arising from the separate corporations in the tax year
prior to the transfer.
d. All are false.
56. R Corporation is merged into B Corporation in an “A” reorganization on June 30, 2011. R has a
$250,000 NOL carryover. B has taxable income (before the NOL deduction) of $800,000 for the year
ending December 31, 2011. How much of R’s NOL can B deduct on the 2011 tax return? (Assume §
382 does not apply.)
a. $0
b. $250,000
c. $50,000
d. $125,000
57. Which one of the following statements regarding computation of the limitation of NOL carryover
described in § 382, relating to the acquisition of “loss corporations,” is true?
a. The value of the loss corporation is considered to be the amount paid by the purchaser.
b. It is assumed that the equity of the loss corporation immediately before change in ownership is
invested in tax-exempt securities that pay interest at a rate prescribed by statute.
c. The amount of NOL carryover that can be used is a product of the FMV of the corporation’s
stock before the change and the “long-term tax-exempt rate.”
d. All are true.
Test Bank 7-9
58. Under Code § 382, if either an owner shift or equity structure shift has occurred, the test for an
“ownership change” must be made. Which is true of an owner shift?
a. An owner shift occurs only when a 5 percent shareholder (determined before or after the change)
buys or sells stock.
b. For purposes of the owner shift, the effect of a stock redemption on the stock ownership
percentage is ignored.
c. Owner shift can occur if a purchaser not owning 5 percent acquires sufficient stock to meet the
5 percent threshold.
d. All of the above are true.
59. Code § 382 limits the deductibility of NOLs acquired from loss corporations, if there has been a
substantial change in ownership—a so-called “ownership change.” In which one of the following
situations has ownership change occurred?
a. R owns 1,000 shares of Q Corporation. Q Corporation has 1,000 shares outstanding. R sells 400
shares to S Corporation.
b. Same as above, except Q Corporation issues 200 shares each to T and U later that same year.
c. M owns 10 percent of Loss Corporation. She purchased additional stock, increasing her
ownership to 15 percent.
d. Loss Corporation, publicly held, has been actively traded such that there has been a complete
change in ownership. At no time did one shareholder own more than 5 percent of stock.
60. Code § 384 limits the ability of a loss corporation to use its loss by purchasing an acquired corporation’s
assets that have a built-in gain. Which one of the following statements is not a condition of § 384
regarding built-in gains?
a. Either Target or Acquiring must have a net unrealized built-in gain.
b. Acquiring corporation must not have an NOL carryforward.
c. There must be a stock acquisition or asset acquisition.
d. All of the above are conditions of § 384.
61. In the “C” reorganization, substantially all of the assets of the target corporation must be obtained by
the acquiring corporation. Which one of the following statements indicates the IRS position
concerning the substantially all the assets requirement in a “C” reorganization?
a. The phrase “substantially all the assets” is defined in Code § 368.
b. “Substantially all the assets” means at least 95 percent of the assets.
c. “Substantially all the assets” refers to at least 70 percent of the gross assets and at least 90 percent
of the net assets.
d. “Substantially all the assets” refers to more than 75 percent of the net or gross assets.
e. Both a. and c. are true.
62. All of the stock of P Corporation is owned by two individuals, J and K. P owns all of the stock of Q
that it acquired by purchase 10 years ago. P manufactures disk drives while Q manufactures floppy
disks. Both corporations have substantial E&P. J and K are deadlocked on the direction of their
businesses. As a result, they have agreed to go their separate ways with J taking over the business of
Q. The most logical way to accomplish their objective is a
a. Spin-off
b. Split-off
c. Split-up
d. Partial liquidation
e. Redemption
63. Network Corporation is a publicly traded corporation with its stock widely held. It owns all of the
stock of Cable Corporation. Both corporations have substantial E&P. A recent government ruling
required Network to divest itself of Cable. As a result, Network distributed all of the stock of Cable to
its shareholders. One Network shareholder, T, received 50 shares of Cable worth $2,000. These shares
had a basis to Network of $500. T must recognize
a. A dividend of $2,000
b. A capital gain of $2,000
c. No gain or loss
d. A dividend of $500
e. A capital gain of $500
64. Mr. A and Ms. B own all of the stock of Salt which in turn owns all of the stock of Pepper. Salt
acquired Pepper 15 years ago. Both corporations conduct active businesses and have substantial E&P.
During the year, Salt distributed the stock of Pepper to A and B. Both A and B each received 100
shares of Pepper stock worth $50,000. In addition, they both received a Pepper bond with a face value
of $10,000 and worth $9,000. Due to the distribution, A and B will each report (assuming the
transaction meets the conditions of § 355)
a. No gain or loss
b. $60,000 dividend
c. $59,000 dividend
d. $10,000 dividend
e. $9,000 dividend
65. Which of the following resembles a dividend?
a. Spin-off
b. Split-off
c. Split-up
66. Which of the following resembles a redemption?
a. Spin-off
b. Split-off
c. Split-up
67. In her landmark case, Evelyn Gregory found that
a. Meeting the literal requirements of the law is not necessarily sufficient to achieve your objective.
b. The General Utilities doctrine was a blessing for taxpayers.
c. Avoiding dividend equivalency requires a meaningful reduction in the shareholder’s interest.
d. Reducing the size of your business by fire is a genuine corporate contraction.
e. None of the above
68. S and P each owns 50 shares of the outstanding stock of G Corporation which specializes in framing
pictures. G owns all 100 shares of the outstanding stock of W Corporation. S and P caused G to form
W many years ago to manufacture frames. This year S and P have decided to divide the corporate
assets and part ways. To this end, G distributed all of the stock in W Corporation to S for all of her
stock in G. This type of corporate division is referred to as
a. A liquidation
b. A spin-off
c. A split-off
69. Under Code § 355, nonrecognition of gain or loss is granted only to distributions of stock or securities
of a “controlled” corporation. Control is present where
a. The distributing parent corporation owns at least 80 percent of the voting power of all classes of
the subsidiary’s stock entitled to vote, and at least 50 percent of the total number of shares of all
other classes of stock.
b. The distributing parent corporation owns at least 51 percent of the voting power of all classes of
c. The distributing parent corporation owns at least 80 percent of the voting power of all classes of
d. None of the above is true.
Test Bank 7-11
70. Brothers A and B each owns 50 percent of the stock of P. P Corporation manufactures coats, and its
wholly owned subsidiary, Q, manufactures ties. Q was acquired 20 years ago. During the current year,
A and B squabbled over company policy and B decided he wanted to go his separate way.
Accordingly, P distributed the stock of Q to B in exchange for all of B’s stock in P, for which he had a
basis of $15,000. The Q stock was worth $100,000. B will report
a. Dividend income of $100,000
b. Dividend income of $85,000
c. Capital gain of $85,000
d. No gain or loss
e. None of the above
71. Under § 355 concerning distributions of stock and securities of a controlled corporation, the active
business requirement states that
a. The activities in which the corporations engage must make a profit.
b. Each business must have been conducted throughout the five-year period ending on the date of
the distribution.
c. None of the businesses may have been acquired in a taxable transaction in the three-year period
ending on the date of the distribution.
d. All of the above are true.
7
Solutions to Test Bank
True or False
1. False. In addition to meeting one of the patterns, there must be a plan of reorganization, the Regulation’s
tests of “continuity of interest” and “continuity of business enterprises” must be met, and the judicially
imposed test for “business purpose” must be met. (See pp. 7-3 through 7-5.)
2. True. As stated in Cortland Specialty Co., a continuity of interest is required to prevent sales from
qualifying as reorganizations. (See pp. 7-3 and 7-4.)
3. False. To meet this requirement, the acquiring corporation must either continue the target corporation’s
historic business or use a significant portion of the target corporation’s assets in a business. (See pp. 7-4
and 7-5.)
4. False. A merger is the absorption of one corporation by another. A combination of two corporations to
form a third is called a consolidation. (See p. 7-7.)
5. True. Section 368(a)(1)(B) specifically limits the acquirer to issuing voting stock. (See p. 7-15.)
6. True. Section 368(a)(1)(B) specifically says voting stock of a corporation that controls the acquiring
corporation may be used in a nontaxable “B” reorganization. In order to have a triangular reorganization,
only the voting stock of the parent may be used. A mixture of parent and acquiring corporation stock is
not permitted in the acquisition of the target. (See p. 7-15.)
7. False. In a “C” reorganization, the acquiring corporation receives assets, not stock of the target. After the
transfer, the target corporation must liquidate. Therefore, the result cannot be a parent-subsidiary group.
(See pp. 7-17 and 7-18.)
8. True. The 1984 Tax Act added the requirement that the target corporation be liquidated in a “C”
reorganization unless the IRS waives the requirement. [See p. 7-17 and § 368(a)(2)(G).]
9. False. Target must also distribute any remaining assets it possesses. (See p. 7-17.)
10. False. The type of assets retained by the target is just as important as the amount of assets. The courts
generally require that those assets critical to the continuation of the target’s business must be transferred.
Failure to do so may cause the transaction to fall outside the scope of a “C” reorganization. (See p. 7-19.)
7-13
11. False. Normally, target corporation’s liabilities are ignored in a “C” reorganization. However, if the
acquiring corporation transfers boot in the form of cash or property to the target, the assumption of
liabilities is treated as a transfer of additional boot. The amount of combined boot is limited to 20 percent
of the total consideration. (See p. 7-19.)
12. True. It is possible for a single transaction to meet the definition of a “C” reorganization and an acquisitive
“D.” In these cases § 368(a)(2)(A) states that it will be treated as a “D” reorganization. (See p. 7-22.)
13. True. A transaction may be an acquisitive “D” reorganization if it meets the requirements of
§§ 368(a)(1)(D) and 354, or a divisive “D” if it meets §§ 368(a)(1)(D) and 355. (See pp. 7-20 through 7-22.)
14. True. The “E” reorganization is a recapitalization that can only involve one corporation and the “F”
reorganization is a mere change in identity that will only involve one corporation. (See pp. 7-28 and 7-30.)
15. False. Each corporation involved must adopt the plan of reorganization. This requirement appears in
§ 361. (See p. 7-31.)
16. True. Tax treatment of shareholders is determined by property exchanged, according to § 354(a). (See
pp. 7-36 through 7-39.)
17. True. The property transferred plus gain recognized on the transfer becomes the basis of the property to
the transferee corporation. (See pp. 7-33 and 7-34.)
18. False. No gain or loss is recognized by the target corporation on its receipt of stock, securities, and boot
from the acquiring corporation in an acquisitive reorganization if the boot is distributed. The transfer of
liabilities in excess of basis does not produce gain except in the case of a “D” reorganization. (See pp. 7-34
and 7-35.)
19. False. Under Code § 361, the target corporation does not recognize any gain or loss on the distribution of
the acquiring corporation’s stock or securities. As a practical matter, the target recognizes gain only on
appreciated property that was not transferred to the acquiring corporation, since the basis of any property
received from the acquiring corporation is its fair market value. (See pp. 7-34 and 7-35.)
20. True. Under the 1986 Tax Reform Act, the full amount of the NOL will survive. If there is a
50 percentage point change in ownership, the amount of the NOL that can be used each year will be
limited. (See pp. 7-42 and 7-43.)
21. False. Although the spin-off is virtually indistinguishable from a dividend distribution, it is a tax-free
distribution if the requirements of § 355 are satisfied. Such conditions include: (1) 80 percent control of the
subsidiary immediately before the distribution; (2) a distribution of at least 80 percent of the stock of the
subsidiary; (3) both the retained and distributed corporations must be involved in an active trade or
business which have been carried on for the five-year period ending on the date of the distribution; and (4)
neither business could have been acquired in a taxable transaction during the five-year period ending on
the date of distribution. Because these conditions are met, the distribution is tax-free to the recipient
shareholders. (See and pp. 7-22 through 7-25.)
22. False. This defines the spin-off method of dividing the corporation. (See pp. 7-22 through 7-24.)
23. True. The subsidiaries continue to survive as separate corporations and the parent no longer exists. (See
Example 30, p. 7-25.)
24. False. The transaction will not qualify as a nontaxable spin-off because the active business requirement is
not met. (See pp. 7-26 through 7-28.)
25. False. His basis is increased by the gain recognized of $1,000 but reduced by the boot received of $1,000.
Thus, the basis is unchanged. (See pp. 7-36 and 7-38.)
26. False. The gain or loss is not recognized because the distribution consisted of only the stock or securities
of the controlled corporation. Gain may be recognized if the control of either the distributing or
controlled corporation is attributable to a purchase within the previous five years. (See p. 7-34.)
Solutions to Test Bank 7-15
Multiple Choice
27. a. Both “continuity of interest” and “continuity of business enterprise” tests contained in the Regulations
must be met. (See pp. 7-3 through 7-5.)
28. c. Boot is acceptable in a reorganization. The exact amount is not specified. The 50 percent limit is for ruling
purposes only. Shareholders can sell the stock provided it was not prearranged. (See pp. 7-3 and 7-4.)
29. c. The doctrine only requires the continuance of target’s most significant line of business or use of a
significant portion, not all of the assets, in a business. (See pp. 7-4 and 7-5.)
30. a. Owning 80 percent of the total voting power and at least 80 percent of all other classes of stock constitutes
control, according to § 368. To meet this definition, the IRS requires shareholders to own at least
80 percent of the total number of shares of each class of nonvoting stock. Choice c. is incorrect because it
is possible to own 80 percent of total stock without owning 80 percent of each of the voting and nonvoting
groups. For example, let us look at the situation where a target corporation has 100 shares of stock
outstanding—50 voting and 50 nonvoting shares. After the reorganization, the acquiring corporation owns
all 50 voting shares, but only 30 nonvoting shares. Note that the acquiring corporation owns only
60 percent of the nonvoting shares (30 shares of the 50 shares outstanding). (See p. 7-5.)
31. b. In an “A” reorganization, the stock of S or P can be used but not both. Statement a. is a consolidation.
Statement c. is a valid drop-down and d. is a valid reverse merger. (See pp. 7-6 through 7-12.)
32. b. All of the target stock is surrendered by target’s former shareholders in a type “A” reorganization by
merger. (See Exhibit 7-2 and pp. 7-6 through 7-10.)
33. d. All the statements are true. Statement c. is true because stock of a controlling corporation may be used as
long as it is not used in addition to stock of the acquiring corporation. (See pp. 7-15 through 7-17.)
34. b. In a reverse triangular merger, the target corporation becomes a controlled subsidiary, and target’s
identity is maintained. The target corporation must end up with “substantially all” the property it owned
before the merger and “substantially all” the property of the merged subsidiary. (See pp. 7-14 and 7-15.)
35. d. The transferee can purchase target stock provided it is a separate transaction. In fact, transferee already
has control provided it is in control immediately after the purchase. (See pp. 7-15 through 7-17.)
36. a. The acquisition must be part of a series of acquisitions that are part of an overall plan to acquire the
requisite control. The time period must be relatively short, for example, 12 months. Acquisition must be
made solely for voting stock. Prior cash purchases do not invalidate the reorganization, provided they are
separate transactions. (See p. 7-17.)
37. c. The target’s former shareholders become voting shareholders in the acquiring corporation. In a “C”
reorganization, the assets of the target are acquired and the target must dissolve. (See Example 18,
p. 7-18.)
38. d. All are true. The “C” reorganization permits a business combination when mergers are not practical or
allowed under state law. (See pp. 7-17 through 7-20.)
39. c. Choice a. qualifies as a “C” reorganization. A subsequent transfer of assets to a corporation controlled by
the acquiring corporation does not affect the “C” reorganization, as § 368(a)(2)(C) allows the acquiring
corporation to restructure the target’s operations. Choice b. also qualifies as a “C” reorganization because
liabilities are disregarded as long as no other boot is transferred. Choice c. does not qualify as a “C”
reorganization since boot exceeds 20 percent of the FMV of the assets transferred [$42,000 > (20%
$200,000)]. (See pp. 7-17 through 7-20.)
40. b. Choice a. is a spin-off. Choice c. describes a split-up. Choice b. is the end result of a split-off, which is used
when shareholders prefer different investments in the future operations of the corporation. (See pp. 7-23
and 7-24.)
41. a. A distribution is required but it does not have to be pro rata. (See p. 7-25.)
42. c. Choice a. does not qualify, since no business was conducted after the transfer. The leasing of assets
described in choice b. would probably not be considered an active trade or business. Situation c. fulfills the
requirements of Code § 355. (See pp. 7-26 through 7-28.)
43. c. The exchange of stock for bonds is not tax-free because the bonds are considered to be boot. (See pp. 7-28 and
7-30.)
44. b. Both choices a. and c. are a stock for stock exchange. Choice b. does not qualify, because the stock
exchanged is not from the same corporation. (See pp. 7-28 and 7-30.)
45. c. The change in this situation is a mere change in identity, which requires a change in the charter. Therefore,
it is an “F ” reorganization. (See p. 7-30.)
46. c. $200,000. Since the target corporation does not recognize gain on the transfer of assets, the basis of the
assets to the acquiring corporation carries over from the target unchanged. (See and pp. 7-33 and 7-34.)
47. b. M’s basis for assets transferred from P in a type “A” reorganization is the same as P’s basis. (See Example 47
and pp. 7-33 and 7-34.)
48. a. Target recognizes neither gain nor loss, provided it distributes the boot to its shareholders. (See p. 7-33.)
49. b. $100,000. The basis of boot received by T is its fair market value. A Corporation was required to treat
$25,000 ($100,000 fair market value - $75,000 basis) as taxable gain. (See pp. 7-33 and 7-34.)
50. b. An $80,000 gain must be recognized by Target on land not transferred. The basis for Target of the office
building and cash received from Acquiring Corporation is fair market value, $400,000 and $200,000
respectively. Remember that Acquiring was forced to recognize the built-in gain on the office building.
(See pp. 7-35 and 7-36.)
51. d. The boot is calculated as follows:
$2; 500 $2; 000

$2; 800 ¼ $560
$2; 500
(See Example 55 and pp. 7-36 and 7-37.)
52. d. $0. S has a realized loss on the exchange. The receipt of boot will not cause the loss to be recognized. [See
p. 7-37 and § 356(c).]
53. d. NOL carryovers are limited in reorganizations. In “C” reorganizations, part of the E&P carries over. Tax
attributes are not attributed to the acquirer in a “B” reorganization because the original corporation
survives. (See pp. 7-39 through 7-41.)
54. b. In “B” reorganizations, tax attributes do not carry over, since only the corporation’s ownership changes.
In divisive “D” reorganizations, the transferor stays in existence and continues an active business and
maintains its carryovers, while the controlled corporation is considered a new entity. (See p. 7-40.)
55. d. E&P of the target is combined with that of the acquiring corporation. The loss corporation’s deficit cannot
be used to offset any E&P of the profitable corporation existing at the date of transfer. A deficit can be
used only to offset the E&P arising, from the combined corporation’s operations after transfer. (See
pp. 7-41 and 7-42.)
56. b. $250,000. The NOL used in the carryover year is limited to the amount of the acquiring corporation’s
income earned after the reorganization. Because this exceeds the NOL, the full amount can be used. (See
pp. 7-42 and 7-43.)
57. d. Under this approach, the new owners of the corporation obtain the same result as they would if they had
invested the amount paid for the loss corporation in tax-exempt securities instead of buying the loss
corporation. (See pp. 7-43 and 7-44.)
Solutions to Test Bank 7-17
58. c. An owner shift is defined as any change in the stock ownership of the corporation that affects the
percentage of stock in the corporation owned by any person who is a 5 percent shareholder before or after
the change. Stock redemption or issuance of stock can change a 5 percent shareholder’s ownership interest
or cause a shareholder to become a 5 percent shareholder. Test for “ownership change” must be made
whenever a 5 percent shareholder buys or sells stock because an owner shift has occurred. (See pp. 7-44
through 7-46.)
59. b. Choice a describes an owner shift involving two 5 percent shareholders, but the increase was only
40 percentage points (0% to 40% for S), not the required 50 percentage points. In b, T and U become
5 percent shareholders. Their 14.29 percentage point increase for both T and U (200 shares ? 1,400 shares)
added to S’s 28.57 percent increase adds up to more than a 50 percent increase. R’s ownership decrease is
ignored. In c, M’s ownership has increased by 50 percent, but the increase itself is only 5 percentage points. In
d, no ownership change occurs, because under the aggregation rule, 100 percent of the stock should be owned
at all times by a single hypothetical shareholder, whose interest has not changed during the testing period.
(See pp. 7-44 through 7-46.)
60. b. The existence of an NOL in either target or acquirer is one of two conditions that must exist before § 384
will apply. (See p. 7-47.)
61. c. For advance ruling purposes in a “C” reorganization, the IRS requires that an acquiring corporation
obtain at least 70 percent of the gross assets and 90 percent of the net assets. This interpretation by the
IRS is found in Rev. Proc. 77-37. Note that the phrase “substantially all the assets” is not defined in the
Code. (See p. 7-19).
62. b. In a split-off, the distributing corporation distributes the stock of a subsidiary to the distributing
corporation’s shareholders in exchange for a portion of its own stock. Assuming the transaction meets all
of the requirements of § 355, the distribution is nontaxable. In this case, J could surrender his stock in P
for all of the stock of Q in a nontaxable fashion. (See pp. 7-23 and 7-24.)
63. c. Under § 355, a corporation may distribute stock and securities to its shareholders tax-free if certain
requirements are satisfied. Such conditions include: (1) 80 percent control of the subsidiary immediately
before the distribution; (2) a distribution of at least 80 percent of the stock of the subsidiary; (3) both the
retained and distributed corporations must be involved in an active trade or business which has been
carried on for the five-year period ending on the date of the distribution; and (4) neither business could
have been acquired in a taxable transaction during the five-year period ending on the date of distribution.
Because these conditions are met, the distribution is tax-free to the recipient shareholders. (See p. 7-36.)
64. e. Under § 355, a corporation may distribute stock and securities to its shareholders tax-free if certain
requirements are satisfied. Such conditions include: (1) 80 percent control of the subsidiary immediately
before the distribution; (2) a distribution of at least 80 percent of the stock of the subsidiary; (3) both the
retained and distributed corporations must be involved in an active trade or business which has been
carried on for the five-year period ending on the date of the distribution; and (4) neither business could
have been acquired in a taxable transaction during the five-year period ending on the date of distribution.
Because these conditions are met, the distribution is normally tax-free to the recipient shareholders.
However, § 356 provides that to the extent the shareholder receives securities with a principal amount in
excess of the principal amount surrendered, the value of such excess is treated as boot. In this case, the
shareholders received $10,000 of principal worth $9,000. Therefore, each must recognize a dividend of
$9,000. (See pp. 7-36 and 7-37.)
65. a. In a spin-off the distributing corporation distributes the stock of a subsidiary to the distributing
corporation’s shareholders. The shareholders do not surrender any stock upon receipt of the subsidiary’s
stock. This is identical to a distribution of property and would be considered a dividend if it did not meet
the requirements of § 355. (See pp. 7-22 through 7-25.)
66. b. In a split-off the distributing corporation distributes the stock of a subsidiary to the distributing corporation’s
shareholders in exchange for a portion of its own stock. This is identical to a redemption and would be
considered a redemption if it did not meet the requirements of § 355. (See pp. 7-22 through 7-25.)
67. a. In the landmark decision of Gregory v. Helvering, Evelyn Gregory carried out a spin-off transaction which
satisfied all of the prescribed statutory requirements. However, because the transaction had no business
purpose and appeared to be a mere ploy to bail E&P out of her corporation, the Supreme Court denied
her favorable treatment. (See p. 7-31.)
68. c. A split-off occurs when the parent corporation distributes the stock of a subsidiary to some or all of its
shareholders in exchange for some or all of their stock in the parent. (See pp. 7-22 and 7-25.)
69. c. Under Code § 355, “control” is present when the distributing parent corporation owns at least 80 percent
of the voting power of all classes of the subsidiary’s stock entitled to vote and at least 80 percent of the
total number of shares of all other classes of stock. (See p. 7-22.)
70. d. The transaction qualifies as a nontaxable split-off because all of the requirements of § 355 are satisfied.
Specifically, at least 80 percent of the stock of the subsidiary must be distributed and the subsidiary and
the parent are engaged in active businesses that were not acquired in a taxable transaction in the previous
five years. (See pp. 7-36 through 7-39.)
71. b. The only requirement is that the activities in which the corporations are engaged constitute a business. The
activities themselves need not be profitable. In fact, a corporation engaged solely in very profitable
investment activities would not qualify. Thus, choice a. is wrong. Choice c. is wrong because it is a five-
year and not a three-year period ending on the date of distribution during which none of the businesses
may have been acquired in a taxable transaction. (See pp. 7-26 and 7-27.)
7
Comprehensive Problems
1. R Corporation wishes to acquire T Corporation. T operates two separate lines of businesses. The primary
business is manufacturing widgets. R will continue this business. The second line of business is a series of health
clubs. R will discontinue this line of business. R wishes to keep T’s operations in a separate business. Ten
percent of T’s shareholders demand cash. The remaining shareholders insist that the transaction be tax-free.
a. One option being considered is to acquire T in an A reorganization. R Corporation would use a

combination of voting and nonvoting stock as well as cash. R would sell the health clubs and transfer
the manufacturing operations to a newly formed subsidiary. Is this a valid A reorganization? Why?
b. Can the above transaction be structured as a B reorganization? If yes, explain why. If not, how would
you change the transaction so that it would qualify?
c. Can the above transaction be structured as a C reorganization? If yes, explain why. If not, how would
you change the transaction so that it would qualify?
2. B Corporation is interested in acquiring Z Corporation so that it can use Z’s NOL carryover.
a. Will Z Corporations NOLs carry over in A, B, and C reorganizations?
b. What limit is there on the use of the NOL in the year of the reorganization?
c. What other limits are there on the use of the NOL?
d. Could Z acquire B and use its loss to offset B’s income?
7-19
Solutions to Comprehensive Problems
1. a. This transaction should qualify as an A reorganization. Since only 10 percent of the shareholders are
being paid cash, the continuity of interest test is met. The use of nonvoting stock is immaterial. The
sale of the second line of business should not cause the transaction to fail the continuity of enterprise
doctrine. The drop down into a new subsidiary is also acceptable. R Corporation must make sure that
the transaction meets the states legal definition of a merger.
b. The use of either cash or nonvoting stock will disqualify the transaction from being a B
reorganization. The sale of the health clubs should be immaterial. One possible way to restructure the
transaction is for T to sell the health clubs first. Then, T can redeem the stock of those shareholders
who want cash. R Corporation could then acquire the remaining stock solely for its voting stock in a
B reorganization.
c. The use of nonvoting stock prevents the transaction from meeting the requirements of a C
reorganization. The use of cash alone is acceptable. However, if the cash plus the liabilities assumed
by R Corporation exceed 20 percent of the value of T Corporation, the transaction will also fail the
boot relaxation rule. To restructure this transaction, R Corporation must use its voting stock instead
of nonvoting stock. It must also stay within the 20 percent boot rule. The sale of the health clubs
should be delayed so that R Corporation can prove it acquired substantially all of Ts assets. The drop
down into a new subsidiary is immaterial.
2. a. NOLs carry over in A and C reorganizations. They stay with the acquired corporation in a B
reorganization.
b. In the year of reorganization, the NOL is limited to profit earned by B Corporation following the
reorganization.
c. If the reorganization results in a 50 percentage point change in the ownership of Z and Z discontinues
its business within two years, the NOL is disallowed completely. If the business is continued following
the change of ownership, then B is limited to using an amount not in excess of the fair market value of
Z Corporation at the time of the reorganization multiplied by the long-term tax-exempt rate.
d. Z Corporation may not use its NOL to offset any built-in gain of B Corporation.
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OREN
Prunus americana
1. Ia. Sta. Bul. 46:285 fig. 1900. 2. Waugh Plum Cult. 174. 1901. 3.
Budd-Hansen Am. Hort. Man. 299. 1903.
Bartlett 1. Bingaman 1.
Waugh places Oren with the “Miner-like” plums but as the variety
grows here it is a typical western Americana—the characters of this
species in leaf, fruit and stone being well shown in the
accompanying plate. It is one of the best of the Americanas in both
fruit and tree. The fruits are large and of good shape, perhaps a little
dull in color and not quite as good in quality as a few other
Americanas but still averaging very well in all fruit-characters. The
flesh is very nearly free from the stone. The trees are typical of the
species, shaggy of trunk and limb, straggling and unkempt in growth
of top, but hardy, robust, healthy and reliable in bearing. It would
seem as if this variety is rather too good to be allowed to pass out of
cultivation until there are more Americanas that are better.
Oren was taken from the wild in Black Hawk County, Iowa, about
1878, by J. K. Oren. Mr. Oren grew trees of this plum on his farm
and permitted all who came to take sprouts, cions and seed until the
variety was very generally disseminated locally. Who introduced it to
the trade and when is not known.
Tree small, spreading, low, dense-topped, hardy, often unproductive;

branches roughish, slightly zigzag, thorny, dark ash-brown, with small
lenticels; branchlets slender, long, twiggy, with internodes of average
length, green changing to dark chestnut-brown, glabrous, with large,
conspicuous, raised lenticels; leaf-buds small, short, obtuse, free.
Leaves falling early, oval or obovate, two inches wide, three and three-
quarters inches long; upper surface dark green changing to golden-yellow
late in the season, smooth and shining, with a narrow, grooved midrib;
lower surface silvery-green, lightly pubescent; apex taper-pointed, base
abrupt, margin coarsely serrate, the serrations ending in sharp points,
eglandular; petiole five-eighths inch long, thick, tinged red, thinly
pubescent, glandless or with one or two prominent, greenish-brown
glands.
Blooming season late and of medium length; flowers appearing after the
leaves, one and one-eighth inches across, white; borne in clusters on
lateral spurs and buds, in pairs or in threes; pedicels five-eighths inch
long, slender, glabrous, green, tinged with red; calyx-tube red,
campanulate, enlarged at the base, glabrous; calyx-lobes narrow,
somewhat obtuse, pubescent on both surfaces and on the margin,
reflexed; petals ovate, somewhat crenate or fringed, tapering below to
long, narrow claws, sparingly hairy along the edge of the base; anthers
yellow; filaments three-eighths inch long; pistil glabrous, shorter than the
stamens.
Fruit intermediate in time and length of ripening season; one and three-
sixteenths inches in diameter, roundish, usually truncate and slightly
oblique, compressed, halves equal; cavity very shallow, flaring; suture a
line; apex roundish or flattened; color dull light or dark red over a yellow
ground, mottled, with thick bloom; dots numerous, very small, light russet,
inconspicuous; stem slender, five-eighths inch long, glabrous; skin tough,
astringent, adhering; flesh dark golden-yellow, juicy, fibrous, soft and
melting, sweet; fair to good; stone semi-free, seven-eighths inch by five-
eighths inch in size, irregularly roundish or ovate, flattened, blunt at the
base and apex, with smooth surfaces; ventral suture strongly winged;
dorsal suture acute, with a narrow and shallow groove.
ORLEANS
Prunus domestica
1. Quintinye Com. Gard. 68. 1699. 2. Langley Pomona 91, Pl. XX fig. 4.
1729. 3. Miller Gard. Dict. 3:1754. 4. Duhamel Trait. Arb. Fr. 2:78, Pl. VII.
1768. 5. Knoop Fructologie 2:52, 55, 56, 57. 1771. 6. Forsyth Treat. Fr.
Trees 19. 1803. 7. Kraft Pom. Aust. 2:32, Tab. 179 fig. 1. 1796. 8.
Brookshaw Pom. Brit. Pl. XI. 1817. 9. Lond. Hort. Soc. Cat. 145, 150.
1831. 10. Prince Pom. Man. 2:62, 67, 85. 1832. 11. Poiteau Pom. Franc.
1:1846. 12. Floy-Lindley Guide Orch. Gard. 289, 290, 383. 1846. 13.
Thomas Am. Fruit Cult. 339. 1849. 14. Elliott Fr. Book 428. 1854. 15.
Thompson Gard. Ass’t 519. 1859. 16. Downing Fr Trees Am. 935. 1869.
17. Mas Pom. Gen. 2:37, fig. 19. 1873. 18. Am. Pom. Soc. Cat. 36. 1875.
19. Oberdieck Deut. Obst. Sort. 414. 1881. 20. Mathieu Nom. Pom. 435.
1882. 21. Hogg Fruit Man. 715. 1884. 22. Guide Prat. 156, 360. 1895.
Anglaise Noire 16, 17, 20, 21, 22. Angloise Noire 5. Brignole? 1.
Brugnole? 1. Brignole Violette 17, 20, 22. Brignole Violette? 5. Common
Orleans 10, 16, 17, 20. Damas Rouge 10. Damas Rouge 5, 9. Damas
Violet? 5. De Monsieur 17, 22. Die Herrnpflaume 7. English Orleans 10,
16, 17, 20. French Orleans 8. Hernnpflaume 17. Herrnpflaume 19.
Herrnpflaume 22. Herzog von Orleans 20, 22. Italian Damask of some 14.
Large Red Orleans 10. Late Monsieur 10, 16, 17, 20. Monsieur 4, 9, 10,
12, 17, 22. Monsieur 10, 13, 14, 15, 16, 20, 21. Monsieur Ordinaire 9, 10,
14, 15, 16, 17, 20, 21, 22. Old Orleans 10, 13, 14, 15, 16, 17, 20, 22.
Orleans 17, 20, 22. Orleans Red Damask 20. Prune de Monsieur 10, 16,
20. Prune de Monsieur 11. Prune d’Orleans 16, 17, 20, 21. Prunelle? 5.
Prune Monsieur 7. Red Damask 10. Red Damask 9, 10, 12, 13, 14, 15,
16, 17, 18, 20, 21, 22. Red Orleans 10, 16, 17, 20. Red Orleans Plum 6.
In Europe Orleans is one of the most renowned of the plums

cultivated. A proof of its popularity is the great number of names, as
shown in the synonymy given above, under which it passes in
England and on the continent. This variety, however, is almost
unknown in America though described by all of the older American
pomologists and probably introduced time and again during the last
hundred years in our orchards. The French fruit books say that the
variety thrives better in southern than northern France and nearly all
of the European writers state that it does best in high, dry, light,
warm soils. It is likely that our climate, and the soils in which plums
are generally grown in America, are not suited to this sort.
Unfortunately this Station has no trees of this variety and the brief
description given is a compilation.
The Orleans has been cultivated for more than two hundred years.
Langley said of it in 1729 “The Orleans Plumb tho a common, is yet
a very valuable Plumb, as well for its fine firm juicy Pulp when well
ripened, as its being a constant and plentiful bearer.” The Red
Damask and the Brugnole mentioned by Quintinye in 1699 are
probably the Orleans; but the Prune de Monsieur of Knoop and the
Monsieur of Tournefort, which are yellow, are distinct. The variety is
evidently of French origin. Mas in his Pomologie Generale, 1873,
states that it first bore the name Brignole Violette, but later was given
the name it now bears in honor of Monsieur, Duke of Orleans,
brother of Louis XIV. Damas Rouge is an old synonym, though
Duhamel described it as a distinct variety. Herrnpflaume is the
common name of the Orleans in Germany and Austria, while in
France, it is often called the Monsieur. It has never been common in
America, yet it was entered on the American Pomological Society
catalog list in 1875.
Tree large, vigorous, hardy, productive, bearing annually; branches
grayish, pubescent; leaves large, ovate, with crenate margins; flowers
large, blooming early; petals roundish, imbricated.
Fruit early mid-season; medium in size, roundish-truncate, sides
unequal; cavity usually shallow, wide; suture distinct; apex flattened; color
dark or purplish-red, overspread with thin bloom, with a sprinkling of pale
reddish dots; stem thick, short; skin tender; flesh yellowish, juicy, usually
melting when properly matured, sweet near the skin but sprightly toward
the center, pleasant-flavored; good; stone free, small, oval, flattened, with
roughish surfaces.
OULLINS
OULLINS
Prunus domestica
1. Hogg Fruit Man. 374. 1866. 2. Downing Fr. Trees Am. 935. 1869. 3.
Pom. France 7: No. 15. 1871. 4. Mas Le Verger 6:43. 1866-73. 5. Am.
Pom. Soc. Cat. 38. 1877. 6. Cat. Cong. Pom. France 366. 1887. 7.
Mathieu Nom. Pom. 446. 1889. 8. Waugh Plum Cult. 117. 1901. 9.
Thompson Gard. Ass’t 4:158. 1901.
Massot 6, 7. Monstrueuse d’Oullins 2, 7. Ouillin’s Gage 2, 7. Oullins
Golden 1. Oullin’s Golden 2, 9. Oullin’s Golden 3, 4, 6, 7. Oullin’s Golden
Gage 2, 7. Oullins Golden Gage 5. Oullin’s Green Gage 8. Prune-Massot
3. Reine-Claude d’Oullins 1, 2, 7, 9. Reine-Claude D’Oullins 3, 4, 6.
Reine-Claude Prêcoce 1, 2, 3, 6, 7, 9. Reine-Claude von Oullins 7. Roi-
Claude 3, 7.
Oullins came to America with the best of recommendations from

European growers but it has fallen so far short of its reputation in
Europe that it was dropped from the fruit list of the American
Pomological Society and is gradually disappearing from cultivation.
The fault is in the fruit which is but indifferent in quality for a plum of
the Reine Claude group. In Europe the variety is rated as one of the
best dessert sorts; in America it is hardly second-rate in quality. This
difference may be due to differences in climate and soil; more
probably, it is due to the greater number of better Reine Claude
varieties grown in America with which it must compete. Hand,
Jefferson, Washington, McLaughlin, Yellow Gage, Spaulding and
Imperial Gage, the cream of the Reine Claude plums, are all
Americans similar to Oullins but much better in quality. Oullins is
hardly surpassed by any of its group in tree-characters and might
well be used for breeding purposes as there are so few sorts of its
kind having satisfactory trees.
This variety, probably a Reine Claude seedling, was found at
Coligny, France, on the estate of M. Filliaud; it was propagated by M.
Corsaint, gardener to the Baron de Toisy, near Cuiseaux
(Department of Saone-et-Loire) and was introduced at Oullins
(Department of Rhone) by M. Massot, nurseryman. The name is
seldom spelled correctly in American fruit books, being either written
with an apostrophe and s or with both left off, these spellings coming
from the supposition that the name comes from that of a man, a
mistake as the history shows. Oullins was placed on the American
Pomological Society catalog fruit list in 1875 but was dropped when
the catalog was revised in 1897.
Tree large, vigorous, spreading, open-topped, hardy, productive;
branches ash-gray, somewhat rough, with numerous, large, raised
lenticels; branchlets stout, the bark rough, medium to above in thickness,
short, with short internodes, greenish-red changing to brownish-red, dull,
lightly pubescent, overspread with faint bloom, with numerous, small
lenticels; leaf-buds large, long, pointed, free; leaf-scars swollen.
Leaves oval or obovate, two inches wide, four and one-quarter inches
long, thick; upper surface dark green, covered with fine hairs, the midrib
grooved; lower surface pale green, pubescent; apex acute or abruptly
pointed, base acute, margin serrate or crenate, with small black glands;
petiole three-quarters inch long, thick, pubescent, tinged red, with from
two to four globose, greenish-brown glands variable in size, usually on the
stalk.
Blooming season medium to late, of average length; flowers appearing
after the leaves, one and one-quarter inches across, white, with a faint
yellowish tinge; arranged on lateral spurs, singly or in pairs; pedicels
eleven-sixteenths inch long, pubescent, greenish; calyx-tube green,
campanulate, pubescent; calyx-lobes broad, obtuse, pubescent on both
surfaces, glandular-serrate, reflexed; petals broadly obovate, crenate,
tapering to short, broad claws; anthers yellowish; filaments three-eighths
inch long; pistil glabrous, equal to the stamens in length.
Fruit early, season short; medium to below in size, roundish, halves
equal; cavity shallow, below medium in width, abrupt; suture an indistinct
line; apex flattened or depressed; color greenish-yellow changing to dull
light yellow, overspread with thin bloom; dots numerous, small, whitish,
inconspicuous, clustered about the apex; stem of medium thickness and
length, adhering well to the fruit; skin thin, slightly astringent, separating
readily; flesh greenish-yellow or pale yellow, somewhat dry, firm, sweet,
not high in flavor; good; stone half-free or free, three-quarters inch by five-
eighths inch in size, broadly oval, flattened, roughened and pitted, blunt at
the base and apex; ventral suture rather narrow, furrowed, with a distinct
but not prominent wing; dorsal suture broadly and deeply grooved.
PACIFIC
PACIFIC
Prunus domestica
1. U. S. D. A. Rpt. 292. 1893. 2. Am. Pom. Soc. Rpt. 150. 1895. 3.

Oregon Sta. Bul. 45:31. 1897. 4. Oregon Hort. Soc. Rpt. 474. 1898. 5. Am.
Pom. Soc. Cat. 40. 1899. 6. Waugh Plum Cult. 117. 1901. 7. Oregon
Agriculturist 17: No. 24, 370. 1908.
Pacific 3. Pacific Prune 2, 3. Willamette 4, 5, 7. Willamette Prune 3.
No part of America is so well adapted to plum culture as the

Pacific Coast and especially the inter-mountain valleys in Oregon.
From the last-named State, though fruit-growing is a very recent
development, a number of meritorious plums have been added to
pomology. One of the best of these, as they grow in New York, is the
Pacific, the fruits of which are well shown in the color-plate. Few
purple plums are more beautiful than this in color and shape, few
equal it in size and very few of its color excel it in quality. The trees
are unusually robust, perfectly hardy and productive. In Oregon the
Pacific has not proved a good prune-making plum but is reported as
standing eastern shipment very well, which, if true, indicates that this
plum would succeed as a market fruit in New York. Pacific is well
worth trying in New York as a commercial variety.
This plum is hopelessly confused with the Willamette. The
following is an abridged account of the two fruits as written us by H.
M. Williamson, Secretary of the Oregon State Board of Horticulture,
and one of the leading authorities on fruit-growing on the Pacific
Coast.
“About 1875 Jesse Bullock of Oswego, Oregon, sent to Germany for

pits of the Italian or Fellenberg prune, and planted the pits received in a
nursery row. When the trees from these began to bear, Mr. C. E. Hoskins
went to Mr. Bullock’s place, examined the fruit and selected trees which
seemed promising, giving to each tree a number. From at least six of
these trees he took scions, propagated them, and named them Bullock
No. 1, Bullock No. 2, etc. He finally decided that only two of these, Bullock
No. 1 and Bullock No. 6, were of sufficient value to justify their further
propagation. Bullock No. 1 was named Champion and Bullock No. 6,
Willamette. Mr. Hoskins told me these names were given by the State
Horticultural Society, but I find no record of this action. He propagated and
sold a good many trees of both varieties, but more of the Willamette than
of the Champion.
“Mr. Hoskins was strongly of the opinion that the Pacific is identical with
the Willamette. I am as strongly of the opinion that they are distinct
varieties. I base my opinion, first, upon the history of the origin of the
Pacific given me by Henry Freeboro, Portland, Oregon, who introduced it;
and, second, upon what appear to me to be marked differences in the two
prunes. A number of years ago I went to Mr. Freeboro’s place when
prunes were ripe and obtained from him a supply of Pacific prunes grown
on trees propagated by him from scions taken from the original Pacific
tree. I took these prunes to Springbrook and compared them with the
Willamette grown on Mr. Hoskins’ place. I was thoroughly convinced that
the two were decidedly different in character, but Mr. Hoskins did not think
so. I noticed first a marked difference in the habits of growth of the trees.
The Pacific trees were of unusually vigorous growth and had a decided
upright tendency. The Willamette trees were very similar to the Italian in
vigor and had the rather spreading habit of growth of the Italian. The
Pacific prunes are larger in size than the Willamette and vary much more
in size. One of the most decided indications of difference is the far greater
tendency to brown-rot of the fruit of the Pacific than is the case with the
fruit of the Willamette. This has been observed when scions of the
Willamette and of the Pacific have been grafted on the same tree for the
purpose of comparison. I have never seen a well dried specimen of the
Pacific, but this may have been the fault of the men who dried the
specimens I have seen. The Willamette dries easily for a prune of its size
and gives a larger percentage of dried to fresh fruit than the Italian,
according to Mr. Hoskins.
“I believe the Willamette is well worthy of more attention in the
Willamette Valley, whereas the Pacific, on account of its extreme
susceptibility to the brown-rot, does not appear to be a safe variety here,
although when perfect it is a magnificent prune for eating fresh, and one of
the very largest known. I am told that in eastern Oregon where climatic
conditions keep out the brown-rot, the Pacific is proving one of the best
varieties for shipping fresh. At the present time the two varieties are much
confused. When the Pacific prune was introduced, Mr. Hoskins and other
recognized authorities, pronounced it the Willamette, and nurserymen
therefore obtained scions from Willamette trees and sold the propagated
trees as Pacifies, and in a more limited way the reverse was done. The
greater part of the trees supposed to be Pacifics are in fact Willamettes.”
At this Station we have the two plums under discussion, the

Pacific having been obtained from Fred E. Young, nurseryman,
Rochester, New York, and the Willamette, under the name Pacific,
from the Oregon Wholesale Nursery Company, Salem, Oregon. The
differences between the two plums in New York are essentially those
given by Mr. Williamson as distinguishing characters in Oregon.
Tree of medium size, upright-spreading, open-topped, hardy, productive;

branches ash-gray, smooth, with small, raised lenticels; branchlets above
medium in thickness, short, with short internodes, greenish-red changing
to brownish-red, covered with heavy bloom and sparingly pubescent, with
indistinct small lenticels; leaf-buds plump, of medium size and length,
obtuse, free.
Leaves obovate, two inches wide, four inches long, the oldest thick and
leathery; upper surface dark green, covered with fine hairs, with a widely
and deeply grooved midrib; lower surface pale green, pubescent; apex
acute or obtuse, base acute, margin crenate, with small dark glands;
petiole seven-eighths inch long, thick, pubescent, tinged red, with from two
to four large, globose, yellowish-green glands usually on the stalk.
Blooming season of medium length; flowers appearing after the leaves,
one and three-sixteenths inches across, white; borne on lateral spurs and
buds, singly or in pairs; pedicels five-sixteenths inch long, thick,
pubescent; calyx-tube green, campanulate, pubescent only at the base;
calyx-lobes broad, obtuse, lightly pubescent on both surfaces but heavily
pubescent along the serrate margin, reflexed; petals oval, dentate,
tapering to short, broad claws; stamens inclined to develop into
rudimentary petals; anthers yellow; filaments seven-sixteenths inch long;
pistil glabrous, equal to the stamens in length.
Fruit intermediate in time and length of ripening season; two inches by
one and five-eighths inches in size, ovate, halves equal; cavity shallow,
narrow, flaring; suture shallow, indistinct; apex bluntly pointed; color bluish,
overspread with thick bloom; dots small, brown, conspicuous, clustered
about the apex; stem thick, one-half inch long, pubescent, adhering well to
the fruit; skin thin, tough, separating readily; flesh pale golden-yellow,
juicy, firm, sweet, spicy; good; stone free, one inch by five-eighths inch in
size, flattened, irregularly broad-oval, obliquely contracted at the base,
blunt at the apex, with rough and pitted surfaces; ventral suture narrow,
with numerous deep furrows, usually blunt; dorsal suture widely and
deeply grooved.
PALATINE
Prunus domestica
This plum, scarcely known outside of two counties in New York, is
of distinctly good quality and if all accounts are true is fairly immune
to black-knot. In size and appearance the fruits are superior to many
other Reine Claude plums, with which it must be compared, so much
so that the variety is probably worth growing outside the region
where the following interesting history shows it has been cultivated
for nearly a century and a half.
Palatine, according to Mr. Washington Garlock of New York,
originated in 1760 when a family of Palatines by the name of Best
came from Germany to the United States and settled in Livingston
Manor (East Camps) now Columbia County, New York. They brought
with them plum pits which they planted and from them secured one
tree. In 1762 they moved to Schoharie County, New York, taking with
them the seedling tree. In their new home they propagated the
variety, which they named Palatine, and disseminated it so
industriously that it became thoroughly established throughout
Montgomery and Schoharie counties and attained great popularity
because of its apparent freedom from black-knot. That this popularity
is merited is attested by the fact that after one hundred and fifty
years it is still extensively grown in that vicinity.
Tree large, vigorous, spreading, dense-topped, productive; branches
thick; branchlets lightly pubescent; leaves flattened, slightly drooping,
obovate, one and five-eighths inches wide, three and one-quarter inches
long, thick, rugose; margin coarsely crenate, eglandular or with few, small
glands; petiole pubescent, glandless or with one or two small glands;
blooming season intermediate in time, short; flowers appearing after the
leaves, more than one inch across, white with yellow tinge at the apex of
the petals; borne singly; calyx-lobes thickly pubescent on both surfaces,
strongly reflexed.
Fruit intermediate in time and length of ripening season; about one and
one-half inches in diameter, roundish or roundish-oval, dull yellowish-
green becoming greenish-yellow at full maturity, mottled and indistinctly
blushed on the sunny side, overspread with thin bloom; skin thin, slightly
sour; flesh light golden-yellow, juicy, fibrous, firm, sweet, pleasant in flavor;
good to very good; stone dark colored, free or nearly so, seven-eighths
inch by one-half inch in size, oval, with thickly pitted surfaces; ventral
suture blunt or with a short, narrow wing; dorsal suture wide, shallow.
PAUL EARLY
Prunus domestica
1. N. Y. Exp. Sta. Rpt. 12:611. 1893. 2. W. N. Y. Hort. Soc. Rpt. 42:83.

1897.
Paul’s Earliest 1, 2.
This variety seems to be under test only at this Station where it

has fruited for a number of years. It is so similar to Early Rivers, a
variety of small account in America, as to be an almost worthless
addition to the list of plums. Paul Early originated with and was sent
out by J. M. Paul, North Adams, Massachusetts, about 1888.
Tree very large, vigorous, round-topped, dense, very productive;

branches covered with numerous fruit-spurs; branchlets twiggy, thickly
pubescent; leaf-buds strongly appressed; leaves flattened, obovate or
oval, two and three-eighths inches wide, four inches long; margin crenate,
with few, small, dark glands; petiole reddish, pubescent, glandless or with
one or two large glands; blooming season intermediate in time, short;
flowers appearing before the leaves, one inch across; borne in scattering
clusters, usually in pairs; pedicels very thick and pubescent; anthers
tinged red.
Fruit very early, season short; one and three-eighths inches by one and
one-quarter inches in size, roundish-oval, dark purplish-black, overspread
with thick bloom; skin tender, slightly sour; flesh greenish-yellow becoming
yellowish, tender, sweet near the surface but sour next the pit, mild; good;
stone clinging, seven-eighths inch by five-eighths inch in size, irregular-
oval, with roughened and thickly pitted surfaces; ventral suture prominent,
seldom winged; dorsal suture with a narrow, shallow groove.
PEACH
Prunus domestica
1. N. E. Farmer Dict. 266. 1797. 2. Prince Treat. Hort. 27. 1828. 3.

Prince Pom. Man. 2:106. 1832. 4. Downing Fr. Trees Am. 307. 1845. 5.
Horticulturist 1:113, 114 fig. 34, 147. 1846. 6. Poiteau Pom. Franc. 1:1846.
7. Thomas Am. Fruit Cult. 335, 336 fig. 262. 1849. 8. Horticulturist 6:132.
1851. 9. Elliott Fr. Book 422. 1854. 10. Downing Fr. Trees Am. 367. 1857.
11. Hooper W. Fr. Book 250. 1857. 12. Am. Pom. Soc. Cat. 86. 1862. 13.
Hogg Fruit Man. 375. 1866. 14. Mas Le Verger 6:73. Pl. XXXVII. 1866-73.
15. Pom. France 7: No. 7. 1871. 16. Gard. Chron. N. S. 17:144. 1882. 17.
Mich. Hort. Soc. Rpt. 466. 1883. 18. Wickson Cal. Fruits 353. 1891. 19.
Wash. Hort. Soc. Rpt. 136. 1893. 20. Guide Prat. 156, 361. 1895. 21. Cat.
Cong. Pom. France 462 fig. 1906.
Apricot Plum 5 incor. Caledonian 15, 20. Calvels Pfirschenpflaume 14,
20. D’Abricot (of Streets of Paris) 20. Duane’s Purple 5 incor, 6, 11.
Howells Large 15, 20, 21. Jenkin’s Imperial 15, 20. Large Peach 16. Large
Peach Plum 3. Nectarine 15, 20. Nectarine Rouge 21. Peach 15, 20.
Peach Plum 3, 5, 14, 20. Peach Plum 7, 8, 9, 10, 11, 12, 17. Pêche 14,
15, 20, 21. Pêche de Calvel 20. Prune Pêche 3, 7, 9, 10, 14, 18. Prune
Pêche 4, 5, 6, 20. Prune-Pêche De Calvel 14. Reine-Claude De Berger
13, 16. Rothe Nektarine 15, ?20.
Peach, the largest early plum, is not high in quality but is justly
esteemed where it can be grown for its earliness, large size and
handsome appearance. Unfortunately this variety is capricious
beyond most other plums as to climate and soils and refuses to
thrive unless its needs are very well supplied in the matter of
environment. In America it seems to find congenial soil and climate
only on the Pacific Coast, and even then refuses to bear well except
on strong, rich soils. In New York, even when grown upon soils
similar to those upon which it does well elsewhere, the fruits are few
and lacking in quality, though the trees are large, vigorous and about
all that could be desired in a good plum tree. It may be possible to
grow Peach in favorable locations in the East; in which case, a plum
of its appearance and quality, coming as early in the season as it
ripens, would make a most desirable addition to the list of plums.
From its behavior elsewhere the situation that would suit it best in
New York is a sunny exposure with a warm, rich, clay loam.
The origin of the Peach is unknown. Poiteau was unable to find
any reference to it in the Eighteenth Century European literature and
thought, therefore, that it must have been unknown to this period.
Samuel Deane mentions a Peach plum in New England in 1797. It is
doubtful, however, whether it is the Peach of this discussion, the
name having been applied indiscriminately to several varieties, the
Goliath, Nectarine and Apricot in particular. Prince, in 1832,
described a Large Peach Plum which he said “had been introduced
a few years since” but as his variety is oval and a clingstone, it is not
the same as the Peach of Poiteau, the one discussed here, this plum
being nearly round and a freestone. Judge James C. Duane of
Schenectady, New York, seems to have first imported the Peach
plum, with several others, from France, in 1820. The name of this
variety was lost during the shipment and as the invoice called for an
Apricot Plum, the names Apricot and Duane’s Plum became locally
applied to what afterwards turned out to be the Peach. C. H.
Tomlinson of Schenectady and A. J. Downing in 1846 made a careful
study of these imported plums and showed conclusively that this
Apricot or Duane’s Plum was the Peach of the French. In 1862, the
American Pomological Society added Peach to the fruit catalog list
and recommended it for the eastern and western sections of New
York.
Tree large, very vigorous, spreading, round or flat-topped, hardy,

medium in productiveness; branches stocky, smooth, dark ash-brown, with
lenticels of medium number and size; branchlets thick, with internodes one
inch long, light brown, covered with short, heavy pubescence; leaf-buds
large, of medium length, conical.
Leaves large, oval, of average thickness; upper surface dark green;
lower surface pale green, pubescent; apex obtuse, margin doubly crenate,
with small glands; petiole three-quarters inch long, thick, pubescent, with a
trace of red, usually with two, small, globose, greenish glands at the base
of the leaf.
Fruit early; thick-set, without a neck, one and seven-eighths inches in
diameter, roundish, slightly angular, halves equal; cavity deep, wide,
compressed; suture shallow, distinct; apex flattened or depressed; color
dark purplish-red, overspread with thin bloom; dots numerous, large,
conspicuous; stem eleven-sixteenths inch long, glabrous, adhering well to
the fruit; skin tough, adhering; flesh golden-yellow, medium juicy, firm,
subacid, mild; good; stone free, one inch by three-quarters inch in size,
roundish-oval, flattened, with rough and pitted surfaces, blunt at the base
and apex; ventral suture wide, prominent, often distinctly winged; dorsal
suture with a wide, deep groove.
PEARL
PEARL
Prunus domestica
1. Burbank Cat. 5. 1898. 2. Am. Gard. 21:36. 1900. 3. Waugh Plum

Cult. 118. 1901.
One can grow seedlings of some plums with considerable
certainty of getting respectable offspring—plums worth having in an
orchard—but the chances of growing a variety of superior qualities
are small indeed. It is a piece of good luck, a matter almost wholly of
luck, when, as in this case, but one parent is known, to secure as
fine a fruit as the Pearl plum. The variety now under notice is one to
be pleased with if it came as a chance out of thousands; its rich,
golden color, large size, fine form, melting flesh and sweet, luscious
flavor, place it among the best dessert plums. In the mind of the
writer and of those who have assisted in describing the varieties for
The Plums of New York, it is unsurpassed in quality by any other
plum. The tree-characters, however, do not correspond in desirability
with those of the fruits. The trees, while of medium size and
seemingly as vigorous and healthy as any, are unproductive. In none
of the several years they have been fruiting at this Station have they
borne a large crop. If elsewhere this defect does not show, the
variety becomes at once one of great value. The fruits of Pearl are
said to cure into delicious prunes—to be readily believed by one who
has eaten the fresh fruits. This variety ought to be very generally
tried by commercial plum-growers and is recommended to all who
grow fruit for pleasure.
Pearl is a recent addition to the list of plums and though its history
is well known its parentage is in doubt. In 1898, Luther Burbank
introduced the variety as a new prune grown from the seed of the
well-known Agen. The male parent is not known but from the fruit
and tree, one at once surmises that it was some variety of the Reine
Claude group, its characters being so like those of the plum named
that no one could suspect that it came from the seed of a plum so far
removed from the Reine Claude as the Agen.
Tree of medium size, vigorous, vasiform, dense-topped, hardy,

unproductive; branches ash-gray, with numerous, small, raised lenticels;
branchlets twiggy, thick, long, with long internodes, greenish-red changing
to brownish-red, very pubescent early in the season becoming less so at
maturity, with numerous, small, raised lenticels; leaf-buds large, above
medium in length, conical, appressed; leaf-scars prominent.
Leaves broadly oval, one and seven-eighths inches wide, three and
one-half inches long, thick, leathery; upper surface dark green, rugose,
covered with fine hairs, with a grooved midrib; lower surface pale green,
pubescent; apex abruptly pointed, base abrupt, margin serrate or crenate,
with small, black glands; petiole seven-eighths inch long, thick, pubescent,
tinged red, glandless or with from one to three small, globose, brownish
glands on the stalk.
Blooming season intermediate in time and length; flowers appearing
after the leaves, showy on account of their size, averaging one and five-
eighths inches across, white, with a tinge of yellow at the apex of the
petals; borne on lateral spurs and buds, usually singly; pedicels one-half
inch long, thick, strongly pubescent, greenish; calyx-tube green,
campanulate, pubescent; calyx-lobes broad, obtuse, pubescent on both
surfaces, glandular-serrate and with marginal hairs, strongly reflexed;
petals obovate or oblong, entire, tapering to short, broad claws; anthers
yellow; filaments nearly one-half inch long; pistil glabrous, shorter than the
stamens.
Fruit intermediate in time and length of ripening season; one and three-
quarters inches by one and one-half inches in size, roundish-oval,
compressed, halves unequal; cavity shallow, narrow, abrupt; suture a line;
apex depressed; color golden-yellow, obscurely striped and splashed with
dull green, mottled, overspread with thin bloom; dots numerous, small,
whitish, inconspicuous, clustered about the apex; stem thick, three-
quarters inch long, thickly pubescent, adhering well to the fruit; skin tough,
separating readily; flesh deep yellow, juicy, a little coarse and fibrous, firm
but tender, very sweet, with a pleasant, mild flavor, aromatic; very good to
best; stone clinging, one inch by five-eighths inch in size, long-oval,
slightly necked at the base, bluntly acute at the apex, with rough surfaces;
ventral suture broad, blunt; dorsal suture with a wide, shallow groove.
PETERS

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Solutions to Tax Research Problems

TAX RESEARCH PROBLEMS

7. In a “C” reorganization, the result is a parent-subsidiary group.

13. A “D” reorganization can be either acquisitive or divisive.

One share of stock worth $50

What is S’s recognized gain or loss on this exchange?

Solutions to Test Bank

51. d. The boot is calculated as follows:

$2; 500 $2; 000

(See Example 55 and pp. 7-36 and 7-37.)

a. One option being considered is to acquire T in an A reorganization. R Corporation would use a

a. Will Z Corporations NOLs carry over in A, B, and C reorganizations?

c. What other limits are there on the use of the NOL?

d. Could Z acquire B and use its loss to offset B’s income?

Solutions to Comprehensive Problems

Tree small, spreading, low, dense-topped, hardy, often unproductive;

In Europe Orleans is one of the most renowned of the plums

Oullins came to America with the best of recommendations from

1. U. S. D. A. Rpt. 292. 1893. 2. Am. Pom. Soc. Rpt. 150. 1895. 3.

No part of America is so well adapted to plum culture as the

“About 1875 Jesse Bullock of Oswego, Oregon, sent to Germany for

At this Station we have the two plums under discussion, the

Tree of medium size, upright-spreading, open-topped, hardy, productive;

1. N. Y. Exp. Sta. Rpt. 12:611. 1893. 2. W. N. Y. Hort. Soc. Rpt. 42:83.

This variety seems to be under test only at this Station where it

Tree very large, vigorous, round-topped, dense, very productive;

1. N. E. Farmer Dict. 266. 1797. 2. Prince Treat. Hort. 27. 1828. 3.

Tree large, very vigorous, spreading, round or flat-topped, hardy,

1. Burbank Cat. 5. 1898. 2. Am. Gard. 21:36. 1900. 3. Waugh Plum

Tree of medium size, vigorous, vasiform, dense-topped, hardy,

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