In a type B reorganization, as defined by the Internal Revenue
Code, the

I. Stock of the target corporation is acquired solely for the
voting stock of either the acquiring corporation or its parent.

II. Acquiring corporation must have control of the target
corporation immediately after the acquisition.

(c) The requirement is to determine whether the statements
are applicable to type B reorganizations. In a type B reorganization,
the acquiring corporation must use solely voting
stock to acquire control of the target corporation immediately
after the acquisition. The stock that is used to make the acquisition
can be solely voting stock of the acquiring corporation, or
solely voting stock of the parent corporation that is in control of
the acquiring corporation, but not both. If a subsidiary uses its
parent’s stock to make the acquisition, the target corporation
becomes a second-tier subsidiary of the parent corporation.