1. Laurel has equipment costing $100,000 and with a FMV of $1,000,000 that is forming a corporation and receiving 6,700 shares. Hardy, who agrees to render $500,000 in services over the next five years, is getting the remaining 3,300 shares. Any problems with this in Section 351 and if so, how do you fix?

2. Bruce Wayne and Dick Grayson each own 50% of Alfred Enterprises, Inc. They need additional capital, so Bruce agrees to transfer $100,000 worth of equipment to the corporation (basis none because of depreciation). Dick agrees to transfer 25% of his 50% to Bruce to make this happen. So, after Bruce transfers the equipment, he will own 75% and Dick will own 25%. Any problems with this in Section 351 and if so, how do you fix?  

Answer rating: 100% (QA)

Question 1 Laurel No gains or losses will be considered as the asset is transferred in a judgmental position and you have the power to manage it after receiving the share The Hardy section sub d state... View the full answer