Unformatted text preview: edits and the alternative minimum tax should be taken into account.
Choices "a", "b", and "c" are incorrect. Each of theses answers treats one of the above items incorrectly. CPA-02142 Type1 M/C A-D Corr Ans: D PM#67 R 3-01 50. CPA-02142 PII Nov 93 #45 Page 3
© 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection
Becker CPA Review, PassMaster Questions
Lecture: Regulation 3 Jones incorporated a sole proprietorship by exchanging all the proprietorship's assets for the stock of Nu
Co., a new corporation. To qualify for tax-free incorporation, Jones must be in control of Nu immediately
after the exchange. What percentage of Nu's stock must Jones own to qualify as "control" for this
Choice "d" is correct.
Rule: In a tax-free incorporation, the percentage for "control" is 80%, (i.e., control exists if the
transferor/shareholder owns at least 80% of the total voting power and at least 80% of the total number of
shares of all other classes of stock...
View Full Document
- Fall '10
- The Land, Taxation in the United States, Educational Development Corp, Type1 M/C, Corr Ans