[Anonymous]

There are no MCQ on Becker dealing with this issue so I haven’t been able to really get a feel for it.

The reason I’m confused is because it states “immediately after the transaction, those transferors/shareholders own at least 80% of the voting stock and at least 80% of the non-voting stock.” Are all the shareholders in a transaction counted as one shareholder for this purpose?

Example: Adam contributes property for 60% ownership and Jill contributes property for 15% ownership. Would they have

^^ Would they both have to recognize gains since cumulative ownership wasn’t above 80%? What if Adam contributed property for 80% ownership and Jill only contributed property for 15% ownership? Would Jill have to recognize gain and Adam not?