Comprehensive Problem. Manuel Mesa is a 50 percent shareholder in a landscaping corporation, Mo Lo Inc. He has just incorporated his own wholly-owned landscaping business, Trim Inc. The other (unrelated) shareholder in Mo Lo wishes to buy Manuel out with one-half the assets of Mo Lo, consisting of tractors, tools, and equiptment, all written down below current value. Manuel wishes to transfer these assets to Trim. What are the tax consequences of the following transaction alternatives, and which one, if any, is preferable?
A. Mo Lo redeems Manuel's stock with the property and Manuel contributes the assets to the capital of Trim.
B. Manuel contributes his Mo Lo stock to Trim and Mo Lo redeems its stock from Trim for the assets.
C. Same as (a), except Manuel sells the assets to Trim for an installment obligation.
D. Same as (b), but Manuel sells his stock to Trim on the installment plan.