Which of the Following Is Not a Required Characteristic of a Qualifying

question 7

Multiple Choice

Which of the following is not a required characteristic of a qualifying Section 351 transaction?

• A)If more than 20 percent of the stock is transferred for services,property must also be transferred by the service provider.
• B)Gain may be recognized if the transferor receives something other than stock.
• C)The transferors must control the corporation after the transfer.
• D)Control requires only owning 80 percent of the value of the voting stock
• E)All are characteristics.

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Definitions:

Hierarchical

Organized in a system of levels with higher ranks or classes having authority over lower ones.

Organic Structures

Flexible and adaptive organizational forms that emphasize decentralized decision-making and a high degree of informal communication.

Mechanistic

A highly structured and formal organizational design that emphasizes hierarchy, fixed duties, and centralized decision-making.

Centralization

The extent to which decision-making power is localized in a particular part of an organization.