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:

Schaie's View

Schaie's View pertains to a theory of cognitive development that proposes that adults go through stages of cognitive maturation involving acquisition, achieving, responsible, executive, and reintegrative stages.

Cognitive Development

The process of growth and change in intellectual capabilities such as thinking, reasoning, and problem-solving, throughout the life span.

Acquisition Stage

A phase in learning or development where new information or skills are obtained.

Executive Stage

In Schaie’s theory, a stage that some middle adults experience who take on executive functions at work and in the community that extends beyond the responsible stage. This stage requires one to focus heavily on learning about complex relationships, multiple perspectives, commitment, and conflict resolution.