QUESTION 1

1. Z is a corporation owned by an individual, C, and a partnership, D. C owns 60 shares of Z common stock, D owns 40 shares of Z common stock. C wishes to sell 30 shares back to Z for $600. C owns 45% of the stock of D Partnership and E, Cs father, owns 2% of the outstanding shares of D.

   	a.	There is no attribution under Section 318 of Ds ownership in Z because C owns only 45%.
   	b.	There is attribution of 47% of Ds ownership in Z.
   	c.	There is attribution of all of Cs shares in Z to D.
   	d.	B and C.
   	e.	None of the above.

2 points

QUESTION 2

1. Z is a corporation owned entirely by two individuals, C and D. C owns 60 shares of Z, D owns 40 shares of Z. D has an option to buy 21 shares from Z.

   	a.	D is considered as owning 61 shares of Z for purposes of 318 and 302 calculations regarding D.
   	b.	D is considered by the IRS as owning 21 shares of Z for purposes of 302 and 318 calculations for C.
   	c.	A and B.
   	d.	None of the above.