Question

For purposes of control under §351, ownership of 30Blank 1Blank 1 30 , Incorrect Unavailable % or more of the voting power of all voting stock and 10Blank 2Blank 2 10 , Incorrect Unavailable % of the total number of shares of each class of nonvoting stock is required. (Enter your answers as whole numbers.)

a. 30; 10
b. 20; 5
c. 25; 15
d. 35; 12

Answer 1

The ownership requirement for control under §351 is at least 80% of the voting power of all voting stock and at least 80% of the total number of shares of each class of nonvoting stock.

Step-by-step explanation:

The correct answer is d. 35; 12.

Section 351 of the Internal Revenue Code (IRC) provides rules for tax-free transfers of property to a corporation in exchange for stock. For purposes of control under §351, a person or group must own at least 80% of the combined voting power of all classes of stock entitled to vote and at least 80% of the total number of shares of each class of nonvoting stock.

Therefore, the ownership requirement for control under §351 is at least 80% of the voting power of all voting stock (30% in this case) and at least 80% of the total number of shares of each class of nonvoting stock (10% in this case).