Chapter 13 - Chapter 13 C Corporations IRC 351 No gain or loss shall be recognized if property is transferred to a corporation by one or more persons

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

This preview shows page 1 - 2 out of 2 pages.

Chapter 13: C Corporations IRC 351: No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stocks in such corporation and immediately after the exchange such person or persons are in control of the corporation Many Examples on Slides Taxable Dividends Only a C Corporation can pay dividends Tier Distributions other than stock Tax Treatment to Shareholders 1. Current Earnings and Profits Dividend 2. Accumulated Earning and Profits Dividend 3. Shareholder’s basis in the stock Nontaxable return of capital 4. Any balance remaining Capital gain Property Dividends Effect on corporation: o Corp. is treated as if it sold the property for fair market value Corp. recognizes gain, but not loss o Increases E&P for excess of FMV over basis of property distributed o Reduces E&P by FMV of property distributed (or basis, if greater) less liabilities on the property N.B: If distributed property is subject to a liability in excess of basis, the fair market value
Image of page 1
Image of page 2

You've reached the end of your free preview.

Want to read both pages?

  • Fall '14
  • fabioambrosio
  • Accounting, Dividend, Corporation, Limited Liability Company, S corporation

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes