Final answer:
c) Both Winkin and Blinkin qualify for the §351 deferral of any gain or loss because they have contributed property to Boat Corporation and collectively control 100% of the corporation after the exchange.
Step-by-step explanation:
The student is asking about the tax treatment of property contributions made to a corporation under section 351 of the Internal Revenue Code which allows contributors to defer any gain or loss if certain conditions are met. Specifically, they must be in control of the corporation immediately after the exchange, which generally means owning 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. In the provided scenario, Winkin and Blinkin are the sole contributors to Boat Corporation and have received 25 and 50 shares of stock respectively. There is no information suggesting that there are other shareholders. If these shares represent all of the outstanding shares of Boat Corporation, both Winkin and Blinkin would hold 100% of the corporation's stock after the exchange, thereby meeting the control requirement. Therefore, assuming no other disqualifying conditions are present, both Winkin and Blinkin qualify for the §351 deferral of any gain or loss on the contribution of their property to the corporation.