Barry, Dan, and Edith Together Form a New Corporation; Barry

question 120

Multiple Choice

Barry, Dan, and Edith together form a new corporation; Barry and Dan each contribute property in exchange for stock. Within two weeks after the formation, the corporation issues additional stock to Edith in exchange for property. Barry and Dan each hold 10,000 shares and Edith will receive 9,000 shares. Which transactions will qualify for nonrecognition?

• A)Only the first transaction will qualify for nonrecognition.
• B)Only the second transaction will qualify for nonrecognition.
• C)Because of the step transaction doctrine, neither transaction will qualify.
• D)Both transactions will qualify under Sec. 351 if they are part of the same plan of incorporation.

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Definitions:

Coursework

The work assigned to and done by a student during a course of study, usually assessed in order to count towards a final grade or mark.

Gestalt Psychology

A psychological approach that emphasizes that the whole of anything is greater than its parts, focusing on patterns and objects as perceived in the human mind.

Structuralism

An approach in psychology that analyzes mental and cultural phenomena in terms of their smallest components and the relations between them.

Inner Experience

The personal, subjective component of what individuals perceive, feel, and think, often considered introspective and self-reflective in nature.