Three individuals form Skylark Corporation with the following contributions: Cliff, cash of $50,000 for 50 shares; Brad, land worth $20,000 (basis of $11,000) for 20 shares; and Ron, cattle worth $9,000 (basis of $6,000) for 9 shares and services worth $21,000 for 21 shares.

A. Ron’s basis in his stock is $6,000
B. Brad’s basis in his stock is $20,000
C. Ron’s basis in his stock is $27,000
D. These transfers are fully taxable and not subject to § 351.
E. Ron has income on the transaction of $20,000.

C. Ron’s basis in his stock is $27,000

Explanation:

Income recognized on services rendered $21,000

Add basis of $6,000

Ron stock basis $27,000

The property contributed by Ron is not considered insignificant compared to the value of the services he has rendered, which is why the entire contribution is counted as being for property.

Hence, the control requirement is satisfied and a valid § 351 transaction results. Ron’s stock basis is $27,000 [$6,000 (basis of cattle transferred) + $21,000 (income recognized on services rendered)]

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer: life insurance

explanation: