Matt and Sheila Form Krupp Corporation

question 15

Multiple Choice

Matt and Sheila form Krupp Corporation. Matt contributes property with an FMV of $55,000 and a basis of $35,000. Sheila contributes property with an FMV of $75,000 and a basis of $40,000. Matt sells his stock to Paul shortly after the exchange. The transaction will

• A)not qualify under Sec. 351.
• B)qualify under Sec. 351 if Matt can show that the sale to Paul was not part of a prearranged plan.
• C)qualify with respect to Sheila under Sec. 351 whether Matt qualifies or not.
• D)qualify under Sec. 351 only if an advance ruling has been obtained.

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Definitions:

Employee

An individual who is hired by an organization or person to perform work under specific terms in exchange for compensation.

Grievance Procedures

Formal processes that allow employees to voice complaints or concerns regarding work conditions, treatment, or policies.

Arbitration

A process of dispute resolution in which an impartial third party, known as an arbitrator, makes a decision to resolve a dispute between two or more parties, often used as an alternative to litigation.

Excessively Legal

Refers to a situation or approach heavily reliant on legal frameworks or actions, often to an extreme or unnecessary degree.