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Four Individuals Form Chickadee Corporation Under § 351

Question 88

Multiple Choice

Four individuals form Chickadee Corporation under § 351.Two of these individuals, Jane and Walt, made the following contributions: Four individuals form Chickadee Corporation under § 351.Two of these individuals, Jane and Walt, made the following contributions: Both Jane and Walt receive stock in Chickadee Corporation equal to the value of their investments. A) Jane must recognize income of $40,000; Walt has no income. B) Neither Jane nor Walt recognize income. C) Walt must recognize income of $130,000; Jane has no income. D) Walt must recognize income of $100,000; Jane has no income. E) None of these. Both Jane and Walt receive stock in Chickadee Corporation equal to the value of their investments.


A) Jane must recognize income of $40,000; Walt has no income.
B) Neither Jane nor Walt recognize income.
C) Walt must recognize income of $130,000; Jane has no income.
D) Walt must recognize income of $100,000; Jane has no income.
E) None of these.

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