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100% SHAREHOLDER OF S CORP TRANSFERS EQUIPMENT TO A NEWLY…

100% SHAREHOLDER OF S CORP...
100% SHAREHOLDER OF S CORP TRANSFERS EQUIPMENT TO A NEWLY FORMED S CORP WHICH IS NOW 50/50 OWNED WITH HUSBAND. WILL THIS STILL QUALIFY FOR A 351 TAX FREE EXCHANGE?
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Answered in 59 minutes by:
3/16/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,140
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Yes this transfer will still count. You will be considered to be in control of 100% of the stock after the transfer. This is because under IRC §267 and §318, you are considered to own any stock that your husband (among other family members) owns.

So no worries! It is still a tax-free transfer. The basis of the assets in the corporation is the same as the basis in your hands. There is no gain to be recognized.

I hope this answers your questions. If you have any more, please feel free to ask and I will be happy to answer.

Thanks!

Roger

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Customer reply replied 4 months ago
Thank you for your help.

You are welcome.

Please don't forget to rate me, as that is how questions are closed.

Thanks!

Roger

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,140
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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