1) Simultaneous transfers:
Albert Able, Brenda Baker, Carla Cox, and Dan Davis are all shareholders of Corporation A. Corporation A has 100 shares if capital stock outstanding. Able, Baker, and Cox each transferred property on February 11, 20*4 and each received 25 shares of capital stock. Dan Davis transferred property on July 17, 20*4 and received 25 shares of stock. Did the transactions satisfy the 80% control test? Explain.
2) Nominal transfers:
Albert Able owns all of the outstanding capital stock (80 shares, FMV $200,000) of Corporation A and desires to bring Betty Baker into the corporation. Betty Baker transfers an asset (FMV $ 50,000/ Basis $ 5,000) in exchange for 20 shares of capital stock. Is the control test satisfied? Explain.
3) Loss of control:
Anne Able incorporates her sole proprietorship by transferring assets in exchange for 100% of the corporate stock. Anne Able then gifts 14% to her son and sells 21% to a third party. Is the control test satisfied?
4) Disproportion:
Albert Able and his son create Corporation A. Albert Able transfers an asset (FMV $800) and receives 40 shares of capital stock. The son transfers an asset (FMV $200) and receives 60 shares of capital stock. Will IRC 351 apply?
5) Boot:
Albert Able and Brenda Baker create Corporation A. Albert Able transfers $ 4,000 cash and receive 40 shares of capital stock. Brenda Baker transfers an asset (FMV $7,000, Basis $2,000) and receives 60 shares of capital stock and $1,000 cash. Does IRC 351 govern? Explain.
6) Boot:
Albert Able transfers three assets in an IRC 351 exchange.
The total market value of the assets is $200,000 and the total basis is $170,000. Albert Able receives capital stock (FMV $160,000) and cash of $40,000. Does IRC 351 govern?
Explain.