Bob and Carl transfer property to Stone Corporation for 90% and 10% of Stone Stock, respectively. Pursuant to a biding agreement concluded before the transfer, Bob sells half of his stock to CArl. Prepare a memorandum for your Tax Manager explaining why the exchange does or does not meet the Sec 351 control requirements. Your Manager has sugested that, at a minimum you consult the following authorities:

IRC Sec 351

IRC Sec 1.351-1