Question

In order to retain the services of Emily, a key employee in Fred’s sole proprietorship, Fred contracts Emily to make her a 30% owner. Fred incorporates the business receiving in return 100% of the stock. Three days later, Fred transfers 30% of the stock to Emily. Under these circumstances, § 351 will not apply to the incorporation of Fred’s business. True/false?

Answer 1

In order to retain the services of Tekashi, a key employee in Ted’s sole proprietorship, Ted contracts with Tekashi to make him a 30% owner. Ted incorporates the business receiving in return 100% of the stock. Three days later, Ted transfers 30% of the stock to Tekashi. Under these circumstances, § 351 will not apply to the incorporation of Ted’s business. True or False? Please explain.   

Services of Tekashi a key employee the to selan Ih order inthe Pro Poi etorship Tad contract lth Tekosh Sole Ted 's Ted to make him incorporates the bsiaess a 301. cone of the StorK three days lotes in feturn loo Yeceiving to Tekashi onder these Ted transfers 20. of the Stock ncorpora tion of civCamstanes $351 coill not apply to the Please explain. Ted's business. TYue or false 9 TRUE In seite of Ted's mom entary cootrolt col not Suffice f such control is os by a contr actually nding PreaYanged agreement. Gecause the threshold Sec 35 is requiremend of 801. for Cantrol unde not mel is Subs cet to federal in come Aax