How much additional property must ting transfer to meadows

Reference no: EM133261843

Assignment:

On July 5, 2020, Ting transferred land with a FMV of $1,000,000 and a tax basis of $250,000 to a newly formed corporation, Meadows Inc., in exchange for 1,000 shares of common stock. Ting was the only transferor and controlled 100% of the corporation at its formation. The corporation plans to eventually to subdivide the property and to begin to sell lots for the creation of a residential subdivision.

On September 8, 2022, Ting's stock is estimated to be worth $1,500,000.

On September 8, 2022, Erica would like to become a part owner of Meadows Inc. She is proposing to transfer in land with a FMV of $450,000 and a tax basis of $100,000 in exchange for 300 shares of Meadows Inc. stock.

a. Will Erica's transfer qualify under Section 351? Why or why not?

b. How much additional property must Ting transfer to Meadows Inc. in order for her ownership to count towards the control test? Support your answer.

Reference no: EM133261843

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