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Prentice Hall's Federal Taxation 2013 Corporations, 26e (Pope)
Chapter C7 Corporate Acquisitions and Reorganizations
1) Taxable acquisition transactions can either be a purchase of assets or a purchase of stock.

Answer: TRUE
Page Ref.: C:7-2
Objective: 1
2) In a taxable asset acquisition, the purchaser does not acquire unknown and contingent liabilities.
Answer: TRUE
Page Ref.: C:7-3
Objective: 1
3) The Sec. 338 deemed sale rules require that 70% of the target corporation's stock be owned.
Answer: FALSE
Page Ref.: C:7-5
Objective: 1
4) Tax attributes of the target corporation are lost when a Sec. 338 deemed liquidation election is made.
Answer: TRUE
Page Ref.: C:7-9 and C:7-10
Objective: 1
5) In a nontaxable reorganization, shareholders of the target corporation recognize gain or loss.

Answer: FALSE
Page Ref.: C:7-13
Objective: 2
6) In a nontaxable reorganization, the acquiring corporation has a holding period for the acquired assets
that begins on the day after the transaction date.
Answer: FALSE
Page Ref.: C:7-12; Topic Review C:7-2
Objective: 2
7) In a nontaxable reorganization, the holding period for the stock received by the target shareholders
includes the holding period of the stock surrendered.
Answer: TRUE
Page Ref.: C:7-13; Topic Review C:7-3
Objective: 2
8) The acquiring corporation does not recognize gain or loss in a reorganization where it receives boot.
Answer: TRUE
Objective: 3
1
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall
9) Type A reorganizations include mergers and consolidations.
Answer: TRUE
Page Ref.: C:7-23; Example C:7-18
Objective: 4
10) In a triangular Type A merger, the acquiring subsidiary corporation must obtain substantially all of
the target corporation's assets.
Answer: TRUE
Page Ref.: C:7-24
Objective: 4
11) In a Type B reorganization, the acquiring corporation obtains substantially all of the target
corporation's assets in exchange for its voting stock and a limited amount of other consideration.
Answer: FALSE
Objective: 4
12) In a Type B reorganization, the target corporation exchange their stock for the acquiring corporation's
voting stock, and the target corporation remains in existence as the acquiring corporation's subsidiary.
Answer: TRUE
Objective: 4
13) A Type C reorganization is a change in identity, legal form, or state of incorporation in which the
shareholders retain the same equity interest.
Answer: FALSE
Page Ref.: C:7-40
Objective: 4
14) Advance rulings are required for all reorganizations.

Answer: FALSE
Page Ref.: C:7-48
Objective: 10
15) Identify which of the following statements is false.

A) Taxable acquisition transactions can either be a purchase of assets or a purchase of stock.
B) The tax-free reorganization rules are an example of the wherewithal to pay concept.
C) A taxable acquisition of a target corporation's assets results in the nonrecognition of gain or loss on the
disposition of each individual asset.
D) Sales of depreciable assets as part of a taxable acquisition result in depreciation recapture.
Answer: C
Page Ref.: C:7-2
Objective: 1
2
A) A taxable acquisition of the assets of a target corporation that is subsequently liquidated, results in a
loss of the target corporation's tax attributes.
B) A taxable acquisition of the assets of a target corporation, that is subsequently liquidated, results in the
target corporation's shareholders recognizing gain or loss on the surrender of their target stock.
C) An acquiring corporation in a tax-free or a taxable acquisition transaction does not recognize gain or
loss when its stock is issued in exchange for property.
D) An acquiring corporation in a taxable acquisition transaction must acquire all of the assets and
liabilities of the target corporation.
Answer: D
Page Ref.: C:7-2
Objective: 1
17) Axle Corporation acquires 100% of Drexel Corporation's stock from Drexel's shareholders for $500,000
cash. Drexel Corporation has assets with a $600,000 adjusted basis and an $800,000 FMV. The assets are
subject to $200,000 in liabilities. Drexel Corporation shareholders purchased their stock eight years ago
for $300,000. Axle Corporation's basis in the Drexel Corporation stock is
A) $800,000.
B) $600,000.
C) $500,000.
D) $300,000.
Answer: C
Explanation: C) Purchaser's basis for stock is its cost (Sec. 1012). The target corporation's basis in its
assets or the amount of its liabilities are not relevant in a cash purchase of stock.
Page Ref.: C:7-4
Objective: 1
18) Identify which of the following statements is true.

A) Acquisition of the stock of a target corporation in a taxable acquisition transaction is reflected in an
increased basis for the target corporation's assets on its books.
B) Acquisition of 100% of the stock of a target corporation in a taxable transaction followed by a tax-free
liquidation of the target corporation permits a step-up in the basis of the target corporation's assets to
their FMV.
C) Usually when 100% of the stock of a target corporation is purchased by an acquiring corporation, the
basis of the assets of the target corporation reflects the purchase price of the target stock.
D) All of the above are false.
Answer: D
Page Ref.: C:7-4
Objective: 1
3
A) A deemed liquidation election is available when a target corporation is liquidated into its parent
corporation.
B) Corporate purchasers generally prefer Sec. 338 treatment because of the significant tax savings
originating from the step-up in basis.
C) The Sec. 338 deemed liquidation rules require that 100% of the target corporation's stock be purchased.
Answer: D
Objective: 1

A) A Sec. 338 election usually triggers taxation to the target corporation.
B) A Sec. 338 election must be made not later than the fifteenth day of the ninth month following the first
stock acquisition in a series of acquisitions that leads to 80% or more stock ownership.
C) When a Sec. 338 election is made, the target corporation is treated as having sold all of its assets at
their FMV at the close of the acquisition date.
D) In a Sec. 338 deemed sale election, the shareholders of the target corporation sell their stock to the
acquiring corporation
Answer: B
Page Ref.: C:7-5 through C:7-7
Objective: 1
21) A stock acquisition that is not treated as a purchase for purposes of meeting the Sec. 338 rules is
A) stock whose adjusted basis is determined by its basis in the hands of the person from whom it was
acquired.
B) stock acquired from a decedent.
C) stock acquired in a tax-free reorganization.
D) All of the above are correct.
Answer: D
Page Ref.: C:7-6
Objective: 1
22) Melon Corporation makes its first purchase of 30% of Hill Corporation stock on July 31 of this year.
Melon Corporation uses a calendar tax year. To use the Sec. 338 election, Melon Corporation must
purchase
A) an additional 50% of Hill Corporation stock by December 31 of this year.
B) an additional 50% of Hill Corporation stock by July 30 of next year.
C) an additional 51% of Hill Corporation stock by December 31 of this year.
D) an additional 51% of Hill Corporation stock by July 30 of next year.
Answer: B
Objective: 1
4
23) Jersey Corporation purchased 50% of Target Corporation's single class of stock on June 1 of this year.
They purchased an additional 40% on November 20 of this year. The Sec. 338 election must be made on or
before
A) June 30 of this year.
B) November 30 of this year.
C) August 15 of next year.
D) June 30 of next year.
Answer: C
Explanation: C) A Sec. 338 election must be made not later than the fifteenth day of the ninth month after
the month in which the acquisition date (November 20, of this year) occurs.
Page Ref.: C:7-5
Objective: 1

A) When the acquiring corporation makes the Sec. 338 election, the target corporation is treated in many
respects as a new corporation.
B) A Sec. 338 election requires the adoption of the old target corporation's tax year by the new target
corporation.
C) Tax attributes of the target corporation are not lost when a Sec. 338 deemed liquidation election is
made.
Answer: A
Page Ref.: C:7-5
Objective: 1

A) The total basis of the target corporation's assets following a Sec. 338 election in general equals the
amount paid for the target corporation's stock minus the target corporation's liabilities.
B) The residual method ensures that any premium paid for the target stock is reflected in depreciable
assets.
C) The allocation of the total basis of the target corporation's assets to the individual assets following a
Sec. 338 election occurs under the residual method.
Answer: C
Objective: 1
26) Which of the following definitions of Sec. 338 property classes is not correct?
A) Class I: cash, demand deposits, and similar accounts in banks, savings and loan associations, etc.
B) Class II: actively traded personal property such as publicly traded securities
C) Class III: covenants not to compete, similar restrictions on trade, etc.
D) Class IV: inventory or other property held primarily for sale to customers
Answer: C
Objective: 1
5
27) When gain is realized by a target corporation from disposing of its assets in a tax-free reorganization,
the gain is
A) recognized if boot is received and immediately distributed to its shareholders.
B) recognized without exception.
C) recognized if boot is received and retained.
D) never recognized.
Answer: C
Page Ref.: C:7-11
Objective: 1
28) In a Sec. 338 election, the target corporation

A) will no longer file a separate return.
B) must use the preacquisition tax year.
C) will have a holding period for assets beginning on the day after the acquisition date.
D) is considered to be a continuation of the old target corporation for purposes of the tax attribute
carryover rules.
Answer: C
Page Ref.: C:7-12
Objective: 1

A) Depreciation recapture rules do not override the nonrecognition of gain or loss rules.
B) The acquisition of liabilities by an acquiring corporation will trigger a gain.
C) A target corporation will recognize a gain when it distributes stock to its shareholders.
D) The basis of property acquired in a reorganization is its FMV.
Answer: A
Objective: 3

A) The target corporation in a tax-free reorganization generally recognizes no gain or loss when boot
property is received in exchange for assets because such property is usually distributed to its
shareholders and creditors when the target corporation is liquidated.
B) In tax-free reorganizations, one transaction cannot qualify for more than one type of tax-free
reorganization.
C) The Sec. 1245 recapture rules override the nonrecognition of gain or loss rules for an asset-for-stock
tax-free reorganization.
Answer: A
Page Ref.: C:7-14
Objective: 3
6
31) Broom Corporation transfers assets with an adjusted basis of $300,000 and an FMV of $400,000 to
Docker Corporation in exchange for $400,000 of Docker Corporation stock as part of a tax-free
reorganization. The Docker stock had been purchased from its shareholders one year earlier for $350,000.
How much gain do Broom and Docker Corporations recognize on the asset transfer?
A)
Broom Docker
$0 $0
B)
Broom Docker
$0 $50,000
C)
Broom Docker
$100,000 $0
D)
Broom Docker
$100,000 $50,000
Answer: A
Objective: 3

A) The acquiring corporation does not recognize gains or losses under Sec. 1001 when it transfers
noncash boot property to the target corporation or its shareholders.
B) Gain recognized by a shareholder in a tax-free reorganization may be characterized as a dividend.
C) If no gain or loss is recognized by a stock or security holder in a tax-free reorganization, the stock or
securities received take a substituted basis equal to the basis of the shares or securities surrendered.
D) Tax-free reorganizations generally do not involve actual redemptions of the stock of the target
corporation's shareholders.
Answer: A
Page Ref.: C:7-17
Objective: 3
33) Paper Corporation adopts a plan of reorganization and exchanges 1,000 shares of its voting stock and
$50,000 in cash for Chase Corporation's assets having a $200,000 adjusted basis and a $275,000 FMV.
Chase Corporation is subsequently liquidated. What is Paper Corporation's basis in the assets acquired in
the exchange?
A) $200,000
B) $250,000
C) $275,000
D) $50,000
Answer: A
Page Ref.: C:7-16
Objective: 3
7
34) Bob exchanges 4000 shares of Beetle Corporation stock that he had purchased for $800,000 for 6000
shares of Butterfly Corporation common stock with a fair market value of $1,000,000. What is Bob's
recognized gain on the exchange and his basis in the Butterfly stock?
A)
Recognized Gain Basis
$0 $1,000,000
B)
$0 $800,000
C)
$200,000 $1,000,000
D)
$100,000 $800,000
Answer: B
Page Ref.: C:7-18
Objective: 3

A) In a tax-free reorganization, the acquiring corporation's holding period for the acquired properties
includes the period of time the target corporation held the properties.
B) In a tax-free reorganization, if the acquiring corporation uses nonmonetary boot property, gains or
losses will be recognized by the acquiring corporation.
C) The receipt of cash by a shareholder results in the recognition of all of his or her realized gain even if
the transaction qualifies as a tax-free reorganization.
Answer: A
Page Ref.: C:7-16
Objective: 2
8
36) Rocky is a party to a tax-free asset-for-stock reorganization. As part of the transaction, Rocky
exchanges 100% of the Hope Corporation stock with a $40,000 basis and a $50,000 FMV for Moth
Corporation stock worth $40,000 and $10,000 cash. Hope Corporation is subsequently liquidated as part
of the reorganization, with Moth receiving the Hope assets and liabilities. Rocky is
A) not required to recognize any gain or loss.
B) required to recognize capital gain or dividend income of $10,000, depending on Hope Corporation's
current and accumulated E&P and Rocky's postacquisition interest in Moth Corporation.
C) required to recognize dividend income of $10,000 if Hope Corporation's current and accumulated E&P
is at least $10,000.
D) able to recognize capital gain income of $10,000 without regard to his post-acquisition interest in Moth
Corporation.
Answer: B
Page Ref.: C:7-17
Objective: 3
37) Buddy owns 100 of the outstanding shares of Binder Corporation stock. Buddy's basis in his Binder
Corporation stock is $100,000. Binder Corporation is merged with Clipper Corporation in a tax-free
reorganization. Buddy receives 50 shares of Clipper stock worth $150,000 and $150,000 cash. The
remaining 100 shares of Binder stock were owned by Bruce who received the same consideration for his
Binder stock. Binder and Clipper have E&P balances of $250,000 and $500,000, respectively. Buddy and
Bruce each own 25% of Clipper Corporation's 200 shares of stock after the reorganization. Which of the
following is correct?
A) Buddy recognizes $200,000 as dividend income.
B) Buddy recognizes $200,000 as a capital gain.
C) Buddy recognizes $150,000 as dividend income.
D) Buddy recognizes $150,000 as a capital gain.
Answer: D
Explanation: D) Buddy's realized gain is $200,000 [($150,000 cash + $150,000 FMV of stock) - $100,000
basis]. Only $150,000 of the $200,000 realized gain is recognized since the boot property is only $150,000.
Because the Clipper shares are worth $3,000 each ($150,000/50), Buddy is treated as owning 100 shares if
he had received all stock. The cash that Buddy received is treated as having been exchanged for 50 shares
of Clipper stock. Because Buddy owns 33.33% (100 shares out of 300 outstanding shares) of the Clipper
stock before the hypothetical redemption and 25% (50/200) afterwards, the $150,000 recognized gain is
characterized as capital gain under the substantially disproportionate redemption rules (i.e., 25% is less
than 0.80 × 33.33% = 26.66%).
Objective: 3
9
38) Acme Corporation acquires Fisher Corporation's assets in a Type A reorganization for $800,000 of
Acme's nonvoting preferred stock and $200,000 (face amount and FMV) of securities. The assets have an
adjusted basis of $600,000 and an FMV of $1,500,000. In addition, Acme Corporation assumes $500,000 of
Fisher's liabilities. At the time of the transfer, Acme's E&P is $400,000. Fisher distributes the stock and
securities to its sole shareholder Barbara for all of her Fisher stock. After the reorganization, Barbara owns
25% of Acme's stock. Barbara has an adjusted basis of $400,000 in her Fisher stock. Barbara must
recognize a gain of
A) $0.
B) $200,000 dividend income.
C) $200,000 capital gain.
D) $650,000 capital gain.
Answer: C
Explanation: C) The entire amount of the securities received is treated as boot since no securities were
surrendered by Barbara. The gain is capital gain since Barbara would own a minority position in Acme
before and after the deemed stock redemption that would occur when the securities were received.
Page Ref.: C:7-20
Objective: 4
39) Acme Corporation acquires Fisher Corporation's assets in a Type A reorganization for $800,000 of
Acme's nonvoting preferred stock and $200,000 (face amount and FMV) of securities. The assets have an
adjusted basis of $600,000 and an FMV of $1,500,000. In addition, Acme Corporation assumes $500,000 of
Fisher's liabilities. At the time of the transfer, Acme's E&P is $400,000. Fisher distributes the stock and
securities to its sole shareholder Barbara for all of her Fisher stock. After the reorganization, Barbara owns
25% of Acme's stock. Barbara has an adjusted basis of $400,000 in her Fisher stock. Barbara's basis for her
Acme securities is
A) 0.
B) $200,000.
C) $350,000.
D) $400,000.
Answer: B
Explanation: B) Since the securities are boot, the basis is their $200,000 FMV.
Objective: 4
10
40) American Corporation acquires the noncash assets of Utech Corporation in exchange for $700,000 of
its voting stock plus $50,000 of cash. Utech Corporation assets are worth $750,000. Utech Corporation
does not distribute the stock and cash but instead holds the stock as an investment. Utech will use the
American cash along with the cash it retained to start a new business. The transaction can be classified as
a
A) Type A reorganization.
B) Type B reorganization.
C) Type C reorganization.
D) The transaction does not qualify as a tax-free reorganization.
Answer: D
Explanation: D) The transaction does not meet the requirements of a Type B (stock-for-stock)
reorganization. The stock and cash must be distributed to qualify as a Type C reorganization unless an
IRS waiver is obtained, and this acquisition most likely does not qualify for a waiver. A Type A
reorganization requires the target Corporation to go out of existence under most state corporation laws.
Page Ref.: C:7-20
Objective: 4

A) To qualify as a Type A reorganization, generally at least 50% of the total consideration used must be
acquiring corporation stock.
B) A Type A reorganization has the advantage of avoiding the acquisition of unknown and contingent
liabilities.
C) A merger usually involves the approval of all of the shareholders of both corporations.
Answer: A
Page Ref.: C:7-22
Objective: 4
42) Rock Corporation acquires all of the assets of Stone Corporation using only its voting stock. Stone
Corporation distributes the Rock stock to its shareholders pursuant to its liquidation. After the
acquisition, Stone Corporation's shareholders own 20% of the Rock stock (by voting power and value).
The transaction is classified as a
A) Type B reorganization.
B) Type C reorganization.
C) Type D reorganization.
D) The transaction does not qualify as a tax-free reorganization.
Answer: B
Explanation: B) The transaction does not meet the stock-for-stock requirements of a Type B
reorganization. Since the control requirement is not met by Stone's shareholders, the transaction cannot
be a Type D reorganization.
Page Ref.: C:7-25
Objective: 4
11
A) In a Type C reorganization, the acquired corporation must distribute stock, securities, and other
property it receives to its shareholders.
B) A Type C reorganization is less flexible than a Type A reorganization because of the solely-for-voting
stock requirement of a Type C.
C) To qualify as a Type C reorganization, the target corporation must be formally dissolved.
D) In a Type C reorganization, shareholders of the acquiring corporation generally do not have to
approve the acquisition.
Answer: C
Page Ref.: C:7-26
Objective: 4

A) The acquired corporation in a Type C reorganization may retain its corporation charter.
B) Alpha Corporation acquires 100% of the assets of Beta Corporation in exchange for $75,000 of Alpha
stock and $25,000 in cash. Beta is subsequently liquidated. This exchange qualifies as a Type C
reorganization.
C) Alpha Corporation acquires 100% of the assets of Beta Corporation in exchange for $75,000 of Alpha
stock and the assumption of $25,000 of Beta liabilities. Beta is subsequently liquidated. This exchange
does not qualify as a Type C reorganization.
Answer: A
Page Ref.: C:7-26
Objective: 4
45) In a Type B reorganization, the

1. stock of the target corporation is acquired solely for the voting stock of either the acquiring
corporation or its parent.
2. acquiring corporation must have control of the target corporation immediately after the acquisition.
A) Only statement 1 is correct.
B) Only statement 2 is correct.
C) Both statements are correct.
D) Neither statement is correct.
Answer: C
Objective: 4
12
A) Both a Type B reorganization or a reverse triangular merger will not allow the target corporation to
remain in existence.
B) Andrews Corporation gives 10% of its stock worth $200,000 and Andrews notes worth $10,000 in
exchange for 80% of Baxter Corporation's stock. The exchange qualifies as a Type B reorganization.
C) In a Type B reorganization, with minor exceptions only voting stock can be used by the acquiring
corporation to acquire the target corporation's stock.
Answer: C
Objective: 4
47) Acquiring Corporation acquires all of the stock of Target Corporation in a Type B (stock-for-stock)
reorganization. Both corporations have always filed separate tax returns. Which one of the following
statements regarding the acquisition is correct?
A) Acquiring and Target Corporations can elect to file a consolidated tax return.
B) Acquiring and Target Corporations must file a consolidated tax return.
C) Acquiring Corporation assumes all of the tax attributes of Target Corporation.
D) Acquiring Corporation must step up or step down the basis of the Target Corporation's assets to their
FMV on the acquisition date?
Answer: A
Explanation: A) Acquiring and Target Corporations can elect to file a consolidated tax return, but they
are not required to do so. Target Corporation retains its tax attributes when a Type B reorganization
occurs. No basis adjustment occurs when Acquiring acquires the Target stock in a Type B tax-free
reorganization.
Page Ref.: C:7-32
Objective: 4

A) A Type B reorganization must be accomplished in one transaction.
B) "Creeping acquisitions" are not allowed in a Type B reorganization.
C) Boxer Corporation acquires 81% of Excel Corporation's stock in a Type B reorganization. When Boxer
Corporation acquires an additional 11% of Excel Corporation's stock two years later in exchange for
Boxer stock, the second acquisition is also treated as a Type B reorganization.
Answer: C
Page Ref.: C:7-30
Objective: 4

A) Ann, Dewey Corporation's sole shareholder, exchanges her Dewey stock having a $400,000 FMV and a
$175,000 adjusted basis for $350,000 of Heider Corporation stock and $50,000 cash. Ann realizes a
$225,000 gain on the stock transfer, none of which is recognized.
B) A Type B reorganization can be accomplished without formal shareholder approval.
C) The target corporation's tax attributes are lost in a Type B reorganization.
Answer: B
Page Ref.: C:7-31
Objective: 4
13
50) Table Corporation transfers one-half of its assets to Chair Corporation in exchange for 100% of Chair
Corporation's single class of stock. Following the exchange, Table Corporation distributes the Chair stock
ratably to its shareholders. This transaction will constitute a
A) Type A reorganization.
B) Type C reorganization.
C) divisive Type D reorganization.
D) acquisitive Type D reorganization.
Answer: C
Page Ref.: C:7-35
Objective: 4

A) A split-off Type D reorganization occurs when part of the assets of one corporation are transferred to a
controlled corporation in exchange for its stock, and shares of the controlled corporation's stock are
distributed to all of the distributing corporation's shareholders without having them surrender any of
their stock in the distributing corporation.
B) In a Type D reorganization, the existence of a good corporate business purpose is necessary before the
stock of a controlled subsidiary can be distributed to the shareholders of the distributing corporation.
C) A distribution of a controlled corporation's stock can be a tax-free Type D reorganization, even if none
of the distributing corporation's assets are transferred to the controlled corporation.
Answer: B
Page Ref.: C:7-38
Objective: 5
52) In which of the following reorganizations does the distributing corporation transfer all of its assets to
two controlled corporations before the distributing corporation dissolves?
A) split-off
B) spin-off
C) split-up
D) Type C reorganization
Answer: C
Page Ref.: C:7-35
Objective: 5
53) Midnight Corporation transferred part of its assets to Noon Corporation in exchange for all of Noon's
stock. Midnight distributed all of Noon's stock pro rate to Midnight's shareholders. What is this type of
reorganization?
A) split-off
B) spin-off
C) split-up
D) dividend distribution
Answer: B
Page Ref.: C:7-35
Objective: 5
14
A) A tax-free spin-off coming under Sec. 355 occurs when a parent corporation distributes stock in a
controlled subsidiary corporation in exchange for some of its own stock.
B) Tax-free split-offs and spin-offs coming under Sec. 355 require the surrender of shareholder stock.
C) When boot is received in a Sec. 355 spin-off transaction, the FMV of the boot will be a dividend to the
extent of the shareholder's ratable share of the distributing corporation's E&P.
Answer: C
Page Ref.: C:7-36
Objective: 5
55) Grand Corporation transfers 40% of its assets having an adjusted basis of $600,000 and an FMV of
$800,000 to New Corporation in exchange for 75% of its single class of stock. Grand Corporation is owned
equally by Annie and Betsy who are unrelated. Annie's basis for her Grand stock is $300,000 and Betsy's
basis is $400,000. Annie exchanges all of her Grand stock for all of the New stock received in the
exchange. Which of the following statements is correct concerning these transactions?
A) Grand Corporation does not recognize a gain on the asset transfer to New Corporation or the stock
distribution to Annie.
B) Annie recognizes a $500,000 capital gain on the exchange of the Grand stock for the New stock.
C) Annie's basis in the New stock is $300,000.
D) Grand's basis for the New assets is $600,000.
Answer: B
Explanation: B) The required 80% control of New Corporation is not obtained to make the transfer a
divisive Type D reorganization. The asset transfer and stock distribution are taxable to all parties. Grand's
acquisition of Annie's stock is a stock redemption that is taxable under Sec. 302(b)(3). Her realized and
recognized gain is $500,000 ($800,000 - $300,000). Annie's basis for the New stock is $800,000. Grand
recognizes a $200,000 ($800,000 - $600,000) gain on the asset transfer, New takes an $800,000 basis for the
Grand assets, and Grand takes an $800,000 basis for the New stock.
Page Ref.: C:7-37
Objective: 5

A) The control requirement for Sec. 355 differs from the control requirement under Sec. 351.
B) Aspect Corporation transfers assets to newly created Expert Corporation in exchange for all of Expert's
stock. Shortly after the transfer, Aspect exchanges one-half of the Expert stock that it receives for land.
The individuals transferring the land have never been Aspect shareholders. This transaction qualifies as a
divisive Type D reorganization and is tax-free to all parties.
C) Common stock can be exchanged for preferred stock in the same corporation as a Type E
reorganization.
Answer: C
Page Ref.: C:7-39
Objective: 6
15
57) Shareholders in Boxer Corporation exchange all of their nonvoting Class B common stock for
additional shares of Boxer's Class A common stock. Which of the following statements is correct?
A) If boot is added to the exchange, the entire gain realized on the exchange is recognized in full.
B) The exchange is a Type F reorganization, assuming all requirements are met.
C) The exchange is tax-free even if no plan of reorganization has been created.
D) The basis of the Class A common stock received is equal to its FMV.
Answer: C
Explanation: C) The exchange is tax-free under Sec. 1036 even if it does not qualify as a tax-free
reorganization under Sec..368.
Objective: 6
58) If the FMV of the stock received in a Type E reorganization does not equal the FMV of the stock
surrendered, the difference may be
A) a contribution to capital.
B) compensation for services.
C) a dividend.
D) All of the above are correct.
Answer: D
Page Ref.: C:7-39
Objective: 6
59) Roby Corporation, a Tennessee corporation, decides to change its state of incorporation to Delaware
to take advantage of its more favorable state corporation laws. Roby Corporation can take advantage of
the Type F reorganization rules by
A) exchanging the Tennessee corporation's assets for the Delaware corporation's stock and liquidating the
Tennessee corporation.
B) liquidating the Tennessee corporation and reincorporating in Delaware.
C) merging the Tennessee corporation stock into an existing Delaware corporation.
D) recapitalizing the Tennessee corporation.
Answer: A
Objective: 6

A) Able Corporation (New York) transfers its assets to Able Corporation (Delaware) in exchange for all of
its stock. Able Corporation (New York) is liquidated. This exchange is a Type F reorganization.
B) Strict adherence to legislative guidelines with regard to reorganizations is sufficient for tax-free
treatment.
C) A suitable business purpose for a tax-free reorganization is to permit the minimization of shareholder
taxes.
Answer: A
Page Ref.: C:7-40
Objective: 6
16
A) The step-transaction doctrine has always been used by the IRS to convert a tax-free transaction into a
taxable transaction.
B) Tax attributes carry over from the target corporation to the acquiring corporation in all acquisitive
reorganizations.
C) In a Type A reorganization, the net operating loss carryover can be used by the acquiring corporation
without limitation in its first tax year that ends after the acquisition date.
D) All all of the above are false.
Answer: D
Objective: 8
62) Grant Corporation transfers highly appreciated stock to Subsidiary Corporation in exchange for all of
its stock. The Subsidiary Corporation stock is distributed to its sole shareholder, Peter. Three weeks after
the distribution of the Subsidiary stock, Subsidiary Corporation liquidates. Peter then sells the
appreciated stock that he received in the liquidation. This series of transactions
A) does not meet the statutory definition of a divisive Type D reorganization.
B) fails the business purpose requirement.
C) results in a capital gain to Peter.
D) None of the above is correct.
Answer: B
Objective: 7
63) Roger transfers assets from his sole proprietorship to his 100%-owned Motor Corporation.
Immediately after the incorporation, Motor Corporation transfers all of its assets to Blue Corporation for
10% of Blue's stock. Motor Corporation is liquidated. Which of the following statements is correct?
A) The asset transfer by Motor Corporation meets the statutory Type C reorganization requirements.
B) The IRS may collapse the two transactions into a single transaction, resulting in denial of tax-free
reorganization treatment.
C) The IRS may apply the step transaction doctrine.
D) All of the above statements are correct.
Answer: D
Objective: 7
64) The acquiring corporation does not obtain the target corporation's tax attributes in
A) a Type A reorganization.
B) a Type B reorganization.
C) an acquisitive Type C reorganization.
D) an acquisitive Type D reorganization.
Answer: B
Page Ref.: C:7-32 and 7-43
Objective: 8
17
65) Acquiring Corporation is 100%-owned by Peter Hart. Target Corporation is 100% owned by Dick
Weber. The two individuals are not related. Target Corporation has $400,000 of NOL carryovers at the
time Acquiring Corporation is considering making a cash acquisition of part or all of Target Corporation's
stock. What is the maximum amount of Target stock that can be acquired in a single transaction without
the Sec. 382 loss limitation rules applying to the NOLs?
A) 49%
B) 50%
C) 80%
D) Any acquisition of Target stock will cause the Sec. 382 loss limitation to apply.
Answer: B
Explanation: B) The Sec. 382 limitation applies to ownership changes, which involve a 5-percent
shareholder increasing his/her ownership interest by more than 50 percentage points (Sec. 382(b)(1)).
Since Peter Hart does not own any Target stock before the acquisition, all of his postacquisition
ownership interest will be considered an increase.
Page Ref.: C:7-44
Objective: 8

A) When determining the use of an NOL carryover following a change of ownership, the old loss
corporation and the new loss corporation may be the same for Sec. 382 purposes.
B) A new loss corporation that does not continue the business enterprise of the old loss corporation
during the two-year period beginning on the date of the stock ownership change cannot use the net
operating loss carryover.
C) One advantage of a tax-free reorganization is that losses realized as part of a tax-free reorganization
are not recognized.
D) For purposes of Sec. 382, ownership changes are tested any time a 5% shareholder has a stock
transaction affecting his ownership.
Answer: C
Page Ref.: C:7-45
Objective: 8
67) Which one of the following is not a corporate reorganization as defined in the Internal Revenue Code?
A) recapitalization
B) mere change in identity
C) merger
D) stock redemption
Answer: D
Objective: 1

A) A plan of reorganization must be a written document.
B) Advance rulings are required for all reorganizations.
C) The IRS will issue an advance ruling on any proposed tax-free reorganization.
Answer: D
Objective: 10
18
69) Brown Corporation has assets with a $650,000 basis and an $800,000 FMV. The assets are subject to
$250,000 in liabilities. Clark Corporation acquires all of Brown's assets and liabilities for $600,000 in cash.
Brown Corporation then liquidates. What is Clark Corporation's basis in the acquired assets?
Answer: In a taxable asset acquisition, the purchaser's basis for the assets is their acquisition cost (Sec.
1012). In this instance, the acquisition cost is $600,000 cash plus the assumption of $250,000 in liabilities
for a total of $850,000.
Page Ref.: C:7-3
Objective: 1
70) Pacific Corporation acquires 80% of the stock of Jackson Corporation for $3,000,000 in the current
year. Jackson's assets have a basis of $2,000,000 and its liabilities are $800,000. The assets are worth
$3,500,000. What gain is recognized by Jackson Corporation on the deemed sale of its assets if a Sec. 338
election is made?
Answer: FMV of $3,500,000 less basis of $2,000,000 equals a recognized gain of $1,500,000.
Page Ref.: C:7-5
Objective: 1
71) Dreyer Corporation purchased 5% of Willy Corporation's stock five years ago for $100,000. Dreyer
then decides to purchase an additional 80% of the Willy stock for $1,000,000 on April 15 of the current
year. On the acquisition date, Willy Corporation's liabilities are $150,000. A $300,000 tax liability is
incurred by Willy on the Sec. 338 deemed sale. What is the total basis of Willy Corporation's assets for
Sec. 338 basis allocation purposes?
Answer: Grossed-up basis of recently purchased stock = $1,000,000 × [(100% - 5%)/80%] = $1,187,500.
Total grossed-up basis of stock = $1,187,500 (grossed-up basis of recently purchased stock) + $100,000
(basis of nonrecently purchased stock) = $1,287,500.
Adjusted grossed-up basis (allocated to individual assets) = $1,287,500 + $150,000 nontax liabilities +
$300,000 taxes = $1,737,500. This basis is allocated to the individual assets by using the residual method.
Objective: 1
19
72) Parent Corporation purchases all of Target Corporation's stock for $200,000 and makes a deemed
liquidation election. Target Corporation has Class I assets with an adjusted basis of $55,000 and an FMV
of $55,000; Class II assets with an adjusted basis of $40,000 and an FMV of $60,000; and Class V assets
with an adjusted basis of $70,000 and an FMV of $100,000. The Class V assets are subject to a $20,000
liability. Assume a 34% corporate tax rate. What is the adjusted grossed-up basis of Target Corporation's
stock?
Answer:
ADSP = [$200,000 + $20,000 - (0.34 × $165,000)]/(1 - 0.34)
=($220,000 - $56,000)/0.66
= $248,333
Purchase price of stock $200,000

Plus: Target Corp. non tax liabilities 20,000
Plus: federal tax on deemed sale
($248,333 - $165,000) × 0.34 28,333
Adjusted grossed-up basis of stock $248,333
Objective: 1
73) Parent Corporation purchases all of Target Corporation's stock for $200,000 and makes a deemed
liquidation election. Target Corporation has Class I assets with an adjusted basis of $55,000 and an FMV
of $55,000; Class II assets with an adjusted basis of $40,000 and an FMV of $60,000; and Class V assets
with an adjusted basis of $70,000 and an FMV of $100,000. The Class V assets are subject to a $20,000
liability. Assume a 34% corporate tax rate.
Assuming that the adjusted grossed-up basis is $237,000 ($200,000 + $20,000 + $17,000 federal income
taxes), what is the allocation of adjusted grossed-up basis to Class VI assets?
Answer: Adjusted grossed-up basis $237,000
Minus: Class I FMV ( 55,000)
Class II FMV ( 60,000)
Class V FMV (100,000)
Allocation to Class VI assets $ 22,000
Objective: 1
20
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The Project Gutenberg eBook of On poetic
interpretation of nature
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Title: On poetic interpretation of nature
Author: John Campbell Shairp
Release date: May 13, 2022 [eBook #68066]
Language: English
Original publication: United States: Houghton, Mifflin, 1900
Credits: Bryan Ness and the Online Distributed Proofreading

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*** START OF THE PROJECT GUTENBERG EBOOK ON POETIC

INTERPRETATION OF NATURE ***
ON
POETIC INTERPRETATION
OF NATURE
BY
J. C. SHAIRP, LL. D.
PRINCIPAL OF THE UNITED COLLEGE OF ST. SALVATOR AND ST. LEONARD,
ST. ANDREWS
BOSTON AND NEW YORK

HOUGHTON, MIFFLIN AND COMPANY
The Riverside Press, Cambridge
1900
PREFACE.
This small book is the result of some lectures which I had occasion
to give to a large popular audience more than a year ago. I have
since re-written and re-cast them into their present shape. Yet the
book still bears the impress of the peculiar object with which the
lectures were composed, and of the circumstances under which they
were delivered. That object was to add a kind of literary supplement
to several longer and more systematic courses of lectures on
physical subjects, such as Chemistry, Geology, and Physiology,
which were delivered at the same time by Professors who are my
colleagues in this College. It seemed to me that some good might be
done, if I could succeed in bringing before our hearers the truth that,
while the several physical sciences explain each some portion of
Nature’s mysteries, or Nature considered under one special aspect,
yet that after all the physical sciences have said their say, and given
their explanations, there remains more behind—another aspect of
Nature—a further truth regarding it, with which, real and interesting
though it is, Science does not intermeddle. The truth on which
especially I wished to fix attention is the relation which exists
between Nature and the sensitive and imaginative soul of man, and
the result or creation which arises from the meeting of these two.
That is a true and genuine result, which it does not fall within the
province of Science to investigate, but which it is one peculiar
function of Poetry to seize, and, as far as may be, to interpret. That
the beauty which looks from the whole face of Nature, and is
interwoven with every fibre of it, is not the less, because it requires a
living soul for its existence, as real a truth as the gravitation of the
earth’s particles or the composition of its materials,—that careful
noting and familiar knowledge of this beauty reveals a new aspect of
the world, which will amply repay the observer,—and that the Poets
are, in a special way, kindlers of sensibility, teachers who make us
observe more carefully, and feel more keenly the wonders that are
around us: these are some of the truths which I wished to bring
before my hearers, and which, if I could in any measure succeed in
doing so, would, I felt sure, not be without mental benefit.
As the audience whom I addressed consisted mainly of young
persons whose chief employments lay elsewhere than in libraries, I
felt that I had no right to reckon on any wide acquaintance with
English literature. This will account for the occurrence in the later
chapters of many well-known passages of English Poetry, which to
persons at all conversant with letters may seem too familiar even for
quotation. If, however, the passages quoted served to illustrate the
views I wished to impress, I was not desirous to travel beyond well-
worn paths.
In treating of a subject which has in recent years engaged the
thoughts of many distinguished men, it could not but be that I should
often come across and use the thoughts of others. No doubt it is not
easy always to discriminate between thoughts that have risen
spontaneously to one’s own mind, and those which have been
suggested by other writers. Whenever I have been aware that I was
using thoughts not my own, I have tried to make due
acknowledgment of this in the text. At the same time I would wish to
acknowledge here more expressly how much I am conscious of
obligation to three living writers,—to Canon Mozley of Oxford, for
suggestions received from his sermon on “Nature,” and incorporated
in my chapter on “the mystical side of Nature;” to Mr. Stopford
Brooke for suggestive generalizations contained in his “Theology in
the English Poets;” and to Mr. Leslie Stephen for some true and new
thoughts in his recent Essay on Wordsworth’s Ethics; some thoughts
derived from the two latter writers I have tried to interweave into the
last chapter of my book.
As to the book itself, I am well aware how small a portion of how
vast a subject it has even attempted to deal with. But, as the original
lectures were written, so this book is meant, mainly for the young. If,
however, it should induce any of these to look on the outward world
with more heedful and thoughtful eyes, and to win thence for
themselves finer observations, and deeper delight, it will have served
a good end.
St Salvator’s College, St. Andrews, June 12, 1877.
CONTENTS.
PAGE
CHAPTER I.
The Sources of Poetry 11
CHAPTER II.
The Poetic Feeling awakened by the World of
Nature 32
CHAPTER III.
Poetic and Scientific Wonder 46
CHAPTER IV.
Will Science put out Poetry? 57
CHAPTER V.
How far Science may Modify Poetry 64
CHAPTER VI.
The Mystical Side of Nature 77
CHAPTER VII.
Primeval Imagination working on Nature—Language
and Mythology 87
CHAPTER VIII.
Some of the Ways in which Poets deal with Nature 102
CHAPTER IX.
Nature in Hebrew Poetry, and in Homer 136
CHAPTER X.
Nature in Lucretius and Virgil 153
CHAPTER XI.
Nature in Chaucer, Shakespeare, and Milton 170
CHAPTER XII.
Return to Nature begun by Allan Ramsay and
Thomson 193
CHAPTER XIII.
Nature in Collins, Gray, Goldsmith, Cowper, and
Burns 205
CHAPTER XIV.
Wordsworth as an Interpreter of Nature 235
THE
POETIC INTERPRETATION OF
NATURE.
CHAPTER I.
THE SOURCES OF POETRY.
Poetry, we are often told, has two great objects with which it deals,
two substances out of which alone it weaves its many-colored fabric
—Man and Nature. Yet such a statement seems hardly adequate.
For is there not in all high Poetry, whether it deals with Nature or with
Man, continual reference, now latent, now expressed, to something
which is beyond and above both? This reference has taken many
shapes, and uttered itself in many ways, according to the belief and
civilization of each age and country. But by whatever mists and
obstructions it has been colored and refracted, it has never been
wholly absent from true Poetry, and has been working itself clearer,
and making itself more powerfully felt, as the world grows older. The
Higher Life encompassing the life both of Man and of Nature; the
deeper Foundation on which both ultimately repose; the omnipresent
Power which binds both together, and makes them work in unison
toward some further end,—this has been a truth ever present in the
highest Poetry, to which great Poets have always witnessed.
Therefore, even in the most summary view of the domain of Poetry,
we must not omit this invisible but most powerful element. To
express it clearly, we must say that Poetry has three objects, which
in varying degrees enter into it,—Man, Nature, and God. The
presence of this last pervades all great Poetry, whether it lifts an eye
of reverence directly towards Himself, or whether the presence be
only indirectly felt, as the centre to which all deep thoughts about
Man and Nature ultimately tend. Regarded in this view, the field over
which Poetry ranges becomes coextensive with the domain of
Philosophy, and indeed of Theology. Dissimilar, often opposed, as is
the procedure of Poetry, of Philosophy, and of Theology, different as
are the faculties which each calls into play, and the mode in which
these faculties deal with their objects, yet the hinges on which all
alike turn, the cardinal conceptions on which their eye is fixed, are
fundamentally the same. While Philosophy and Theology, in their
striving to attain distinct conceptions, are forced to deal with these
great ideas separately, and to keep them systematically apart,
Poetry, on the other hand, under the fusing and blending power of
imagination, is, in its highest mood, pervaded by a continual
reference to all the three at once, and will at times combine and flash
them all at once upon the soul in one inspired line.
It is, however, of only one of these three main objects of Poetry
that I now propose to treat—the action of Poetry on external Nature,
the way in which the poets deal with the outward world. In doing this
it will appear at a glance, and will become more clear in the sequel,
that it is impossible to isolate this one aspect of Poetry; that, even
when the poet’s regards are mainly turned toward the outward world,
the sense of God and of man is not far away. But even when we do
our best to limit the subject as far as may be, it is so vast in itself and
in its ramifications, that, far from hoping to exhaust it in these few
pages, I shall be well content if, when they are finished, it is found
that a few avenues of thought have been opened up, a few glimpses
obtained into truths which are real and suggestive.
Before going farther, let me say what I mean by Nature, for there is
no word which more needs definition. There is none, except perhaps
its counterpart, Reason, which is used in more various, often
conflicting, meanings, or with more shades of meaning, each
passing into the other. By Nature, then, I understand the whole sum
of appearances which reach us, which are made known to us,
primarily through the senses. It includes all the intimations we have
through sense of that great entity which lies outside of ourselves, but
with which we have so much to do. For my present purpose I do not
include Man, either his body or his mind, as part of Nature, but
regard him rather as standing out from Nature, and surveying and
using that great external entity which encompasses and confronts
him at every turn, he being the contemplator, Nature the thing
contemplated.
The same external Nature which Poetry works on supplies the
staple or raw material with which all the Physical Sciences deal, and
which they endeavor to reduce to exact knowledge, subduing
apparent confusion and multiplicity into unity, law, and order. Each of
the Physical Sciences attempts to explain the outward world in one
of its aspects, to interpret it from one point of view. And the whole
circle of the Physical Sciences, or Physical Science in its widest
extent, confines itself to explaining the appearances of the material
world by the properties of matter, and to reducing what is complex
and manifold to the operation of a few simple but all-pervading laws.
But besides those aspects of Nature which Physical Science
explains, over and above those laws which the Sciences discover,
there are other sides or aspects of Nature which come to us through
other than scientific avenues, and which, when they do reach us,
bring home to us new truth, and raise us to noble contemplations.
This ordered array of material appearances, these marshaled lines
of Nature’s sequences, wonderful and beautiful though they be, are
not in themselves all. No reasonable being can rest in them.
Inevitably he is carried out of and beyond these, to other inquiries
which no Physics can answer: How stand these phenomena to the
thinking mind and feeling heart which contemplates them? how
came they to be as they are? are they there of themselves, or is
there a Higher Centre from which they proceed? what is their origin?
what the goal toward which they travel? Inquiries such as these,
which are the genuine product of Reason, lead us for their answer,
not to the Physics of the Universe, but to another order of thought, to
Poetry, to Philosophy, and to Theology. And the light thrown from
these regions on this marvelous outward framework, while it
contradicts nothing in the body of truth which Science has made
good, permeates the whole with a higher meaning, and transfigures
it with a splendor which is Divine.
Philosophy and Theology we must for the present leave alone,
and ask only what is that aspect of Nature, that truth of the External
World, with which Poetry has more immediately to do. To put it in the
simplest way: it is Beauty, that strange and wonderful entity with
which all creation is clothed as with a garment, or rather I should say
pervaded and penetrated as by a subtle essence, inwrought into its
inmost fibre. The Poet is the man to whom is given the eye that sees
this more instinctively, the heart that feels it more intensely, than
other men do; and who has the power to express it and bring it home
to his fellow-men. But if I were to confine myself to this I should not
be saying much. For the question would at once be asked, “Pray,
what is Beauty?” And it might be further asked, “Is it not as much the
business of the Painter as of the Poet to seize and express the
visible beauty of which you speak?”
Any attempt to answer the first question, and to explain what is
Beauty, would involve a long discussion, perhaps not a very
profitable one. At any rate it would lead me far from my present
purpose. This only may be said in passing. Light, as physicists
inform us, is not something which exists in itself apart from any
sentient being. The external reality is not light, but the motion of
certain particles, which, when they impinge on the eye, and have
been conveyed along the visual nerve to the brain, are felt by the
mind as light,—result in the perception of light. Light, therefore, is not
a purely objective thing, but is something produced by the meeting of
certain outward motions with a perceiving mind. Again, certain
vibrations of the air striking on the drum of the ear, and
communicated by the nerve of hearing to the brain, result in the
perception of sound. Sound, therefore, is not a purely objective
entity, but is a result that requires to its production the meeting of an
outward vibration with a hearing mind; it is the result of the joint
action of these two elements. In a similar way, certain qualities of
outward objects, certain combinations of laws in the material world,
when apprehended by the soul through its æsthetic and imaginative
faculties, result in the perception of what we call Beauty. Therefore
Beauty, neither wholly without us nor wholly within us, is a product
resulting from the meeting of certain qualities of the outward world
with a sensitive and imaginative soul. The combination of both of
these elements is requisite to its existence. It is no merely mental or
subjective thing, born of association, and depending on individual
caprice, as the Scotch philosophers so long fancied. When the two
elements necessary to the perception of it have met, it is a reality as
inevitable and as veritable as the law of gravitation, or any law which
science registers. And when, either through our own perception, or
through the teaching of the poets, we learn to apprehend it—when it
has found entrance into us, through eye and ear, imagination and
emotion, we have learnt something more about the world in which
we dwell than Physics have taught us,—a new truth of the material
universe has reached us through the imagination, not through the
scientific or logical faculty.
If, then, Beauty be a real quality interwoven into the essential
texture of Creation, and if Poetry be the fittest human expression of
the existence of this quality, it follows that Poetry has to do with truth
as really as Science has, though with a different order of truth. This
is perhaps not the common view of the matter. An old Scotch
gentleman I once knew, one of the most sagacious and wise of his
generation, who, whenever anything was propounded which was
more than usually extravagant and absurd, used to dismiss it with a
wave of his hand, saying: “Oh, that is Poetry.” Yet he was one who
could see in the outlines of his native hills, and feel in all human
relations, whatever was most beautiful. There are, I dare say, a good
many sensible people who share my friend’s view, to whom Poetry is
only another name for what is fanciful, fantastic, unreal—only, as one
called it, a convenient way of talking nonsense. To these I would say,
If this be so, if Poetry be not true, if it have not a real foundation in
the nature of things, if genuine Poetry be not as true a form of
thinking as any other, indeed one of the highest forms of human
thought, then I should not recommend any one to waste time on it,
but to have done with it, and turn to more solid pursuits. It is because
I have a quite opposite conviction, because I believe Poetry to have
a true and noble place in this order of things, a place not made by
the conceit of man, but intended by the Maker of this order, because
I hold Poetry to be, what Wordsworth has called it, “the breath and
finer spirit of all knowledge”—to be “immortal as the heart of man,” it
is because of these convictions that there is claimed for it the serious
regard of reasonable men, and that it seems worth our while to dwell
for a little on one, though only one, aspect of this many-sided study.
The real nature and intrinsic truth of Poetry will be made more
apparent, if we may turn aside for a moment to reflect on the
essence of that state of mind which we call the poetic, the genesis of
that creation which we call Poetry. Whenever any object of sense, or
spectacle of the outer world, any truth of reason, or event of past
history, any fact of human experience, any moral or spiritual reality;
whenever, in short, any fact or object which the sense, or the
intellect, or the soul, or the spirit of man can apprehend, comes
home to one so as to touch him to the quick, to pierce him with a
more than usual vividness and sense of reality, then is awakened
that stirring of the imagination, that glow of emotion, in which Poetry
is born. There is no truth cognizable by man which may not shape
itself into Poetry. It matters not whether it be a vision of Nature’s
ongoings, or a conception of the understanding, or some human
incident, or some truth of the affections, or some moral sentiment, or
some glimpse into the spiritual world; any one of these may be so
realized as to become fit subjects for poetic utterance. Only in order
that it should be so, it is necessary that the object, whatever it is,
should cease to be a merely sensible object, or a mere notion of the
understanding, and pass inward,—pass out of the coldness of the
merely notional region into the warm atmosphere of the life-giving
Imagination. Vitalized there, the truth shapes itself into living images
which kindle the passion and affections, and stimulate the whole
man. This is what has been called the real apprehension of truths, as
opposed to the merely notional assent to them. There is no quality in
which men more differ than in this intensity of mental nature, this
power of vividly realizing whatever a man does lay hold of. It is an
essential—indeed a primary—ingredient in the composition of the
Poet; but is not confined to him. It is shared by all men who are
powerful in any line of thought or action. This mental energy, this
intensity of realizing power, is the stuff out of which are made all who
in any way really move their fellow-men. It creates, as has been well
said, “Heroes and saints, great leaders, statesmen, preachers, and
reformers, the pioneers of discovery in science, visionaries, fanatics,
knight-errants, and adventurers.” In these and such like, the men of
abounding energy, who have revolutionized states and moved the
world, the process had begun with the vivid realization of some truth
through the imagination; but it has not stopped there. It has gone on
from the imagination to the affections. It has stirred the hopes, the
fears, the loves, the hates of the soul, enkindling them and driving
them with full force on the will, and propelling the man into action. In
the Poet, on the other hand, the process not only begins, but
continues in the imagination, kindling, no doubt, a real glow of
emotion, but not leading him, as poet, to any outward action, save
the one action of giving vent to what he feels, of finding poetic
expression for the vision with which his imagination is filled.
In this we see the distinction between the Poet and those other
men of intense soul, who share with him the power of vivid
apprehension, of making real through the imagination whatever
truths they see at all. They carry that truth which they have
imaginatively apprehended into the region of the passions and the
will, and rest not till they have condensed it into outward action. He
keeps the truths which he sees within the confines of imagination,
and is impelled by his peculiar nature to seek a vehicle for it, not in
action but in song, or in some other form of artistic expression. And
hence the practical danger which besets the Poet, and indeed all
æsthetic and literary men, of becoming unreal, if that truth which
they see and cultivate for artistic purposes they never try to embody
in any form of practical action, any common purpose with their
fellow-men.
If then it be asked what are the proper objects of Poetry, what is
the proper field for the exercise of the Poet’s art, the answer,
supposing what I have said to be true, is, the whole range of
existence; wherever the sensations, thoughts, feelings of man can
travel, there the Poet may be at his side, and find material for his
faculties to work on. The one condition of his working is, that the
object pass out of the region of mere dry fact, or abstract notion, into
the warm and breathing realm of imagination. What the mental
process is by which objects cease to be mere dead facts,
informations, and become imaged into living realities, I stay not to
inquire. The whole philosophy of Imagination is a subject on which
the metaphysicians have as yet said little that is helpful.
With regard to the working of Imagination and other so-called
faculties, Philosophers, I rather think, have cut and carved our
mental nature with too keen a knife. They have “murdered to
dissect.” Our books lay it down, for instance, as an axiom, that a
definite act of the pure understanding must needs precede every
movement of the affections, that we must form a distinct conception
of a thing as pleasant before we can desire it, that we must first
judge a character to be noble, before admiration of it can be
awakened. I am not sure that this is the true account of the matter,
am not convinced that the understanding unmixed with feeling, the
pure intelligence untouched by sentiment, must first decide before
the affections can be moved. Is it so clear that in all cases we can
separate knowledge from affection? Is there not a large field of truth
—namely, moral truths, in which we cannot do so—into which the
affections must actively enter before any judgment can be formed?
For, as has been said,[1] “The affections themselves are a kind of
understanding; we cannot understand without them. Affection is a
part of insight; it is required to understand the facts of the case. The
moral affections, e. g., are the very instruments by which we
intellectually apprehend good and high human character. All
admiration is affection—the admiration of virtue, the admiration of
nature. Affection itself then is a kind of intelligence, and we cannot
separate the feeling in our nature from the reason. Feeling is
necessary for comprehension, and we cannot know what embrace
particular instance of goodness is, we cannot embrace the true
conception of goodness in general, without it.”
If this be true of moral apprehension, if in this intelligence and
affection are so coincident, so interpenetrate each other, that we
cannot say which is first, which last, where the one ends, the other
begins, the same truth holds good in imaginative apprehension.
Here, too, there is not first a cut-and-dry intellectual act, and then a
succeeding emotion. From the first, in every act of the imagination,
these two elements are present simultaneously; though it is true that
in time the emotional element tends to grow stronger than the
intellectual, sometimes even overpowers it. Imagination in its
essence seems to be, from the first, intellect and feeling blended and
interpenetrating each other. Thus it would seem that purely
intellectual acts belong to the surface and outside of our nature,—as
you pass onward to the depths, the more vital places of the soul, the
intellectual, the emotional, and the moral elements are all equally at
work,—and this in virtue of their greater reality, their more essential
truth, their nearer contact with the centre of things. To this region
belong all acts of high imagination—the region intermediate between
pure understanding and moral affection, partaking of both elements,
looking equally both ways.
But it is not with the philosophy of the process, but with the results
that we have now to do. All men possess this power of vitalizing
knowledge in some measure. The mental qualities which go to make
the Poet have nothing exclusive or exceptional in them. They differ
nothing in kind from those of other men—only in degree. As one well
entitled to speak for the Poets has told us,—the Poet, the man of
vivid soul shares the same interests, sympathies, feelings as other
men, only he has them more intensely. “He is distinguished from
other men, not by any peculiar gifts, but by greater promptness and
intensity in thinking and feeling those things which other men think
and feel, and by a greater power of expressing such thoughts and
feelings as are produced in him.”[2]
I have said that the range of Poetry is boundless as the universe.
Whenever the soul comes into living contact with fact and truth,
whenever it realizes these with more than common vividness, there
arises a thrill of joy, a glow of emotion. And the expression of that
thrill, that glow, is Poetry. The range of poetic emotion may thus be
as wide as the range of human thought, as existence. It does not
follow from this that all objects are alike fit to awaken poetry. The
nobler the objects the nobler will be the poetry they awaken, when
they fall on the heart of a true poet. But though this be so, yet poetry
may be found springing up in the most unlikely places, among what
seem the driest efforts of human thought, just as you may see the
intense blue of the Alpine forget-me-not[3] lighting up the darkest
crevices, or the most bare and inaccessible ledges of the mountain
precipice.
In illustration of this, let me give an anecdote which I lately read in
one of Canon Liddon’s sermons in St. Paul’s:—“Why do you sit up so
late at night?” was a question put to an eminent mathematician. “To
enjoy myself,” was the reply. “But how can that be? I thought you
spent your time in working out problems.” “So I do, and that is my
enjoyment,” answered the mathematician. “Depend upon it,” he
added, “those lose a form of enjoyment too keen and sweet to be

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Corporations Partnerships Estates and

Prentice Halls Federal Taxation 2013 Corporations

Prentice Halls Federal Taxation 2016 Corporations

Prentice Halls Federal Taxation 2015 Corporations

Prentice Halls Federal Taxation 2015 Corporations

Prentice Halls Federal Taxation 2014 Corporations

Prentice Halls Federal Taxation 2013 Individuals 26th

Prentice Halls Federal Taxation 2013 Comprehensive 26th

Prentice Halls Federal Taxation 2014 Corporations

Chapter C7 Corporate Acquisitions and Reorganizations

1) Taxable acquisition transactions can either be a purchase of assets or a purchase of stock.

5) In a nontaxable reorganization, shareholders of the target corporation recognize gain or loss.

14) Advance rulings are required for all reorganizations.

15) Identify which of the following statements is false.

18) Identify which of the following statements is true.

20) Identify which of the following statements is false.

24) Identify which of the following statements is true.

25) Identify which of the following statements is true.

28) In a Sec. 338 election, the target corporation

29) Identify which of the following statements is true.

30) Identify which of the following statements is true.

32) Identify which of the following statements is false.

35) Identify which of the following statements is true.

41) Identify which of the following statements is true.

44) Identify which of the following statements is true.

45) In a Type B reorganization, the

48) Identify which of the following statements is true.

49) Identify which of the following statements is true.

51) Identify which of the following statements is true.

56) Identify which of the following statements is true.

60) Identify which of the following statements is true.

66) Identify which of the following statements is false.

68) Identify which of the following statements is true.

Purchase price of stock $200,000

Title: On poetic interpretation of nature

Author: John Campbell Shairp

Release date: May 13, 2022 [eBook #68066]

Original publication: United States: Houghton, Mifflin, 1900

Credits: Bryan Ness and the Online Distributed Proofreading

*** START OF THE PROJECT GUTENBERG EBOOK ON POETIC

BOSTON AND NEW YORK

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