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:

Bioethical Issues

Ethical controversies or dilemmas related to medical and biological research and their applications.

Principalistic

Relating to an approach in ethics that emphasizes basic principles such as autonomy, beneficence, non-maleficence, and justice as groundwork for moral decision-making.

Objectivist

A follower of Objectivism, a philosophy founded by Ayn Rand, emphasizing rational individualism and the pursuit of self-interest.

Global Health Issues

These are health problems that transcend national borders and often have a global political and economic impact.