At a minimum your memorandum should include the following:

- One Internal Revenue Code Sections.

- Two court cases (one of the court cases must be a U.S. Court of Appeals case, i.e.,

circuit court case). You may use a circuit court case from any circuit since you are not

being given residence information.

- One Revenue Ruling.

- One other primary authority (do not use another code section or case for this

requirement).

TAXPAYER INFORMATION

One of your tax clients, Greta Mills, called you this morning with a tax issue. In an exchange qualifying for Section 351 tax-free treatment, Greta received 100 shares of the White Corporations stock, plus a right to receive another 25 shares. The right is contingent on the valuation of a patent contributed by Greta. Because the patent is pending, the patent cannot be valued for several months.

Greta would like you to explain what her tax consequences will be when she exercises her right and receives the 25 shares. Specifically, for purposes of Section 351, whether the 25 shares will be considered boot and thus taxable to her, or be considered additional nontaxable stock.

Please research Gretas question and prepare a Tax Research Memorandum detailing your results.