To Meet the Control Test Under Section 351, a Taxpayer

question 51

True/False

To meet the control test under section 351, a taxpayer transferring property to a corporation must by himself own 80 percent or more of the corporation's voting stock and 80 percent of each class of nonvoting stock after the transfer even if there are other transferors of property.

Recognize the principles of the random walk theory and its assertions about stock price movements.

Comprehend the relationship between interest rates and the present value of future earnings.

Understand the importance of diversification in reducing investment risk.

Learn the benefits of long-term investment strategies and the historical advantage of stocks over bonds.

---

Definitions:

Depletion Expense

an accounting and tax concept used to account for the reduction of a product's reserves, such as minerals, oil, and gas.

Salvage Value

The estimated resale or scrap value of an asset at the end of its useful life.

Depletion Expense

The allocation of the cost of natural resources over the period they are consumed or sold.

Mineral Deposit

A natural accumulation of minerals within the Earth that can be economically extracted and utilized.