This Year X, Y, and Z Formed a New Corporation

question 57

Multiple Choice

This year X, Y, and Z formed a new corporation.X and Y contributed appreciated property for 50 percent of the stock.Z contributed property and services for the remaining 50 percent of the stock.Of the amounts given below, what is the minimum amount of stock that Z must receive for his property contribution if the exchanges of × and Y are to be nontaxable.

• A)8 percent
• B)10 percent
• C)20 percent
• D)30 percent
• E)50 percent

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Definitions:

Informal Status

A social ranking or position attained by an individual within a group based on interaction, respect, or popularity rather than official roles.

Status Symbols

Objects or signals that serve to indicate an individual's social position or economic wealth to others.

Normative Influence

The impact of social norms and the expectations of others on an individual's behavior, encouraging conformity to group standards.

Norms

Collective expectations that members of social units have regarding the behavior of each other.