Question

The control requirement under § 351 requires that the person or persons transferring property to the corporation immediately after the transfer own 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.

True/False

Answer 1

correct statement is true

Step-by-step explanation:

• The basis of assets received by the corporation as capital contribution from the shareholder is equal to the basis of assets held by the shareholders. The basis of assets transferred to a corporation through a non-governmental folder as a contribution to capital is zero.
• In order for the transaction to be unstable under § 351, property transferors must be in control of the corporation immediately after the exchange. Regulation means that the person or persons transferring the property must own at least 80 percent of the stock. More specifically, transfer-shareholders have the right to own at least 80 percent of the total combined voting power of all classes of stock and at least 80 percent of the total number of shares of all other classes.