Question

Please check if my answers to first part is correct.

Discussion Question 4-6 (LO. 1)

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 after  the transfer, stock possessing at least 80%  of the total combined voting power of all classes of stock entitled to vote, and at least 75%  of the total number of shares of all other classes of the corporation's stock.

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." 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. 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. 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.

Answer 1

0 The control requinement of see 351 specifies that the person or persons transferring propenty_to the corporation must own, immediately after the transfer Stock possessing at least 80% of the total combined voting power of all classes of Stock entithed to vote and at least 80% of the total number of Shanes of all Othere Classes of stock of the corporation : - Ik a Shaneholder prenders only services to the conporation for stock, the transfer can't quality unden sec 351 because Services rendered are not property T. True b. If a shareholder rendens services and transfers propenty to the corporation for stock the shareholder will never be treated as a member of the False" transferring group Stock cenden oderey momentary control counts in determining control af the plan for the sole on other disposition of the stock existed before the "false" exchange

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 reganding the later transfers because no documentation exists making multiple transfers pant of an integrated plas: " False