Without 351

Realized gain/income
From James:
Personal services rendered
to Triple J Corporation 0 $ 12,000

From Jennifer:
Installment obligation $ 10,000 $ 60,000
Secret process 0 $ 57,000

From Jeff:
Inventory $ 11,000 $ 17,000
Total

With 351

1) Transfer of qualified property

2) In exchange for qualified stock
3) Transferor(s) own 80% or more subsequently

From James:
Personal services rendered
to Triple J Corporation 0 $ 12,000

From Jennifer: (Over 80%)

Installment obligation $ 10,000 $ 60,000
Secret process 0 $ 57,000

From Jeff:
Inventory $ 11,000 $ 17,000
 Shareholders Corp
Shares Weight Ordinary Capital Tax basis Tax basis
income gain shares assets

120 0.082192 $ 12,000 0 $ 12,000 $ 12,000 Capitalized or expensed

600 $ 50,000 $ 60,000

570 $ 57,000 $ 57,000
1,170 0.80137 $ 117,000

170 0.116438 $ 6,000 $ 17,000

1,460 1
$ 17,000

Shareholders Corp
Ordinary Capital Tax basis Tax basis
income gain shares assets

120 $ 12,000 0 $ 12,000 $ 12,000 Capitalized or expensed

600 $ - $ 10,000
570 $ - $ -
1,170 $ 10,000

170 $ 6,000 $ 17,000

$ 17,000
d or expensed

d or expensed