Final answer:
Section 351 entails the transfer of property to a corporation in exchange for its stock and maintaining control. For tax purposes, 'control' under § 351 means owning at least 80% of the company's voting stock and of each class of non-voting stock after the exchange.
Step-by-step explanation:
The issue in question pertains to the concept of property ownership, specifically under the legal framework given as § 351. This section generally deals with tax-related matters, specifically the transfer of assets to a corporation where the transferor retains control by owning a certain percentage of the company after the exchange. When a person or entity transfers assets to a corporation and, in return, receives stock of that corporation, for the transaction to qualify under § 351 and possibly defer tax recognition on any gain, the transferor(s) together must have 'control' of the corporation immediately after the exchange.
In the context of § 351, 'control' typically means ownership of stock possessing at least 80% of the total combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of all other classes of stock of the corporation. The right to pass by permission and subject to the control of the owner, as referenced, could imply the rights and limitations a shareholder has with respect to property passing into the control of a company.
To more precisely answer the student's half-stated question, for purposes of control under § 351, ownership usually refers to the requisite percentage of stock ownership in the corporation immediately after the exchange of property for stock. This ensures that the transferors collectively have the ability to direct and manage the affairs of the corporation and satisfy the statutory definition of control.