C and D jointly organized Z corporation. C transfers in property Z in exchange for...
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Accounting
C and D jointly organized Z corporation. C transfers in property Z in exchange for $500 in cash and 45 shares of Z's stcok. D transfers $500 in cash to Z in exchange for the other half of Z's stock (that is, the other 45 shares). Z also issues 5 shares of its stock to lawyer in payment of lawyer's bill for legal services in organizing Z.
a This is not a good 351 transaction since property transferors do not have control immediately afterwards. Lawyer has received shares for services.
b This is not a good 351 transactions because the property transferors do not control 80% of the shares since A only receives 45 shares.
c This transfer qualifies fro non-recognition under 351
d None of the above
Correct answer is?
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