Discussion Question 18-6 (LO. 1)

Question Content Area

1. Complete the statements below regarding "what is the control requirement of 351".

The control requirement specifies that the person or persons transferring property to the corporation must own, immediately

beforeafter

the transfer, stock possessing at least

50%75%80%100%

of the total combined voting power of all classes of stock entitled to vote, and at least

50%75%80%100%

of the total number of shares of all other classes of the corporation's stock.

Question Content Area

2. Classify the following as either "True" or "False" regarding the control requirement of 351.

a.	If a shareholder renders only services to the corporation for stock, the transfer cannot qualify under 351 because services rendered are not "property."	TrueFalse
b.	If a shareholder renders services and transfers property to the corporation for stock, the shareholder will never be treated as a member of the transferring group.	TrueFalse
c.	Stock under momentary control counts in determining control if the plan for the sale or other disposition of the stock existed before the exchange.	TrueFalse
d.	If a long period of time elapses between the transfers of property by different shareholders to the corporation, the control requirement may be lost regarding the later transfers because no documentation exists making multiple transfers part of an integrated plan.	TrueFalse