Matt and Sheila Form Krupp Corporation

question 78

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

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Definitions:

Thalamus

A neural structure serving as a conduit for signal transmission of sensory data to the cerebral cortex.

Optimal Level

Optimal level refers to the most favorable point or degree of something for achieving a specific result or condition.

Arousal

A physiological and psychological state of being awake or reactive to stimuli, often associated with increased activity in the nervous system.

Task Performance

Refers to the effectiveness and efficiency with which an individual completes a given task or series of tasks.