Which of the Following Statements Best Describes the Concept of Control

question 35

Multiple Choice

Which of the following statements best describes the concept of control as it applies to a section 351 transaction?

• A)Control is defined as the ownership of 80 percent or more of a corporation's voting stock.
• B)Control is defined as the ownership of 80 percent or more of the fair market value of a corporation's stock.
• C)Control is defined as the ownership of 80 percent or more of a corporation's voting stock and 80 percent or more of the fair market value of a corporation's stock.
• D)Control is defined as the ownership of 80 percent or more of a corporation's voting stock and 80 percent or more of the total number of shares of each class of nonvoting stock.

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Definitions:

Collecting Taxes

The process by which a government or authority gathers monetary contributions from citizens and businesses to fund public services and infrastructure.

Popular Majority

The majority of total votes cast by the public in an election, as opposed to a majority of elected representatives or electoral votes.

Tyranny

Tyranny is a form of government in which a single ruler holds absolute power and exercises it in a cruel or unjust manner.

Antifederalists

Opponents of the ratification of the U.S. Constitution, who favored a weaker central government.