Stu Walker Has Owned All 200 Shares of Lance Corporation's

question 96

Essay

Stu Walker has owned all 200 shares of Lance Corporation's stock for the past six years. This year, Megan Jones contributes property with a $100,000 basis and a $160,000 FMV for 160 newly issued Lance shares. At the same time, Stu contributes $30,000 in cash for 30 newly issued Lance shares. What tax issues should Megan and Stu consider with respect to the stock acquisitions?

---

Definitions:

Human Nature

The inherent characteristics, including ways of thinking, feeling, and acting, that all humans are said to possess naturally.

Founding

The action of establishing something important, such as a nation, organization, or institution.

Federalism

A political system in which power is divided between a central authority and constituent political units, such as states or provinces.

Great Compromise

An agreement made during the Constitutional Convention of 1787 that in part established a two-house legislature, combining elements of both proportional and equal representation.