Tammy forms White Corporation in a transaction qualifying under § 351.In that transaction,Tammy transferred cash and equipment in exchange for White Corporation common (1,000 shares)and preferred (200 shares)stock.The preferred stock is § 306 stock for Tammy.

Question

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According to § 306, if the transferred property is considered to be "disqualified preferred stock," then it is not qualified for nonrecognition treatment under § 351. Therefore, as the preferred stock is disqualified stock for Tammy, the transaction does not qualify under § 351.

Tammy Forms White Corporation in a Transaction Qualifying Under §