In Order to Retain the Services of Eve,a Key Employee

question 60

True/False

In order to retain the services of Eve,a key employee in Ted's sole proprietorship,Ted contracts with Eve to make her a 30% owner.Ted incorporates the business receiving in return 100% of the stock.Three days later,Ted transfers 30% of the stock to Eve.Under these circumstances,§ 351 will not apply to the incorporation of Ted's business.

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Definitions:

Ultimate Attribution Error

A bias in which negative behaviors of out-group members are attributed to their character, while similar behaviors by in-group members are attributed to situational factors.

Intergroup Contact

The interaction between members of different social, ethnic, or cultural groups, which can reduce prejudice and improve intergroup relations.

Institutional Support

The assistance and resources provided by organizations or institutions, especially in educational, social, or professional settings, to facilitate goals or well-being.

Social Identity Theory

A theory positing that individuals define themselves in terms of group memberships and these group identifications influence behavior and attitudes.