Irs Section 351

Private letter rulings irc section 351.

Irs section 351. No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the. Regarding the federal income tax consequences of a new corporate structure that will result in a holding company with subsidiaries with various charters being all chartered under tribal law. Internal revenue code section 351 transfer to corporation controlled by transferor.

The transaction is treated as if you sold property to the corporation in return for cash. Section 368 c defines control to mean the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation. What is a section 351 a tax free exchange.

Particularly the irc section 351 requirements that the contributing shareholders control more than 80 of the interest after the transaction and the concerns over voting versus non. Generally transferring property into a corporation in exchange for its stock is a taxable event. If the requirements of section 355 or so much of section 356 as relates to section 355 are met with respect to a distribution described in paragraph 1 then solely for purposes of determining the tax treatment of the transfers of property to the controlled corporation by the distributing corporation the fact that the shareholders of the distributing corporation dispose of part or all of.