Sun and Moon Corporations Each Have Only One Class of Stock

question 8

Multiple Choice

Sun and Moon Corporations each have only one class of stock outstanding. Their stock ownership is shown below. Which of the four stock ownership changes that are illustrated is the minimum change that is needed if Sun and Moon Corporations are to be brother-sister corporations under the 50%-80% requirements? (Assume the two corporations are equally valued.)

• A) No stock ownership change is required.
• B) Charles must acquire an additional 10% of Moon Corporation.
• C) Charles must acquire an additional 5% of Sun Corporation.
• D) Arthur must acquire an additional 30% of Moon Corporation.

---

Definitions:

Intangible Objects

Non-physical assets such as intellectual property, rights, and licenses that have value and can be owned or transferred.

Ascertainable Value

A value that can be precisely determined or measured.

Limited Liability Company

A corporate framework blending the direct taxation feature of a partnership and the restricted liability characteristic of a corporation.

Unmarried Partner

An individual in a committed romantic relationship who lives with another individual without being legally married to them.