If a shareholder exchanges property for 75% of common stock of a corporation, could the gain...
If a shareholder exchanges property for 75% of common stock of a corporation, could the gain realized and recognized be calculated using section 351 rules?
Homework Answers
Answer:
Section 351 defers gain or loss on transfer if after transfer the transferor is in control of the transferee corporation immediately after the exchange. Control is defined as 80% of total combined voting power of stock or at least 80% of total number of shares of all classes.
In this case since the shareholder exchanges property for 75% of common stock, section 351 does not apply.
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If a shareholder exchanges property for 75% of common stock of a
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