when a person contributes cash or property to a corporation and receives stock in exchange this is classified as a section 351 transaction and
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when a person contributes cash or property to a corporation and receives stock in exchange this is classified as a

section 351 transaction and generally is not taxable as long as the property or cash contributed is equal to the value of the stock. Personal services contributed are considered wages and, if exchanged for stock, become a taxable event.

A corporate can also reduce its investment income when purchasing certain types of stock of other companies. This credit is know as the 'dividend received deduction'.

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