As a tax professional, you will have many questions that will be asked of you that will often require either minimal or significant research. This is how you stay gainfully employed in the tax profession because there's always something to learn and there's always a question that your client's want answered. Chapter 18 is the first chapter where we delve into how exactly a corporation is formed and what qualifies as a contribution under IRC Section 351 which would qualify for the nonrecognition of the gain or loss under IRC Section 351. This gain or loss is simply deferred and not a complete exclusion. See Example 1 on page 18-3 of the text for more information. For IRC Section 351 to apply three requirements must be met which are as follows: (1). Property is transferred (2). In exchange for stock and (3). The property transferors are in control of the corporation after the exchange Remember that all 3 requirements must be met in order for IRC section 351 to apply and consider the following question from your client. Scenario: You have a client named Lisa Lime who is so excited about recently developing a natural deodorant formula that has proven to be a hit. She contributes a nonexclusive license to use her new patented deodorant to her wholly owned corporation, Lisa, Inc. for 100 shares of stock. Does IRC Section 351 apply? Why or why not? Explain your research in a letter to Lisa and a memo for the firm's files. Lisa's address is 1234 Main Street Omaha, NE 68102. to your client and for the memo for the firm's files. In your memo for the firm's files, mention the Revenue Ruling that Revenue Ruling 69-156 modifies. Lastly, remember that for this assignment you are writing one letter to your client AND one for the firm. Keep that in mind when writing your responses. A client may not understand all of the technical terms, but the technical information may be appropriate for the memo for the firm's files