Chapter 13 - Chapter 13: C Corporations IRC 351: No gain or...

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Chapter 13:C CorporationsIRC 351:No gain or loss shall be recognized if property is transferred to a corporation by one ormore persons solely in exchange for stocks in such corporation and immediately after theexchange such person or persons are in control of the corporationMany Examples on SlidesTaxable DividendsOnly a C Corporation can pay dividendsTierDistributions other than stockTax Treatment to Shareholders1.Current Earnings and ProfitsDividend2.Accumulated Earning and ProfitsDividend3.Shareholder’s basis in the stockNontaxable return of capital4.Any balance remainingCapital gainProperty DividendsEffect on corporation:oCorp. is treated as if it sold the property for fair market valueCorp. recognizes gain, but not lossoIncreases E&P for excess of FMV over basis of property distributedoReduces E&P by FMV of property distributed (or basis, if greater) less liabilitieson the property

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Term
Fall
Professor
fabioambrosio
Tags
Accounting, Dividend, Corporation, Limited Liability Company, S corporation

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