MedCo is planning on transferring its assets to CareCo as an acquisitive Type D reorganization. You are one of the accountants preparing documentation for CareCo for the reorganization. You examined the rules regarding a Type D reorganization and initially calculated that the net FMV of the MedCo assets is met, but that the gross FMV of the assets is 40%. After you mentioned this to your client, CareCo provided new documents with the gross value almost meeting the percentage requirement. Upon closer examination, you noticed that the assets being transferred have not changed; only the values assigned to the assets have. You talked to your manager, who pointed out that CareCo needs this reorganization to be completed, and that it is not your job to second-guess CareCo’s valuation.1. What are the requirements of a Type D reorganization, especially the percentages of the assets transferred?2. Why would it matter if the new documents were “adjusted” to qualify the transaction as a reorganization?3. What should you do about this situation?