(Top QUALITY 2024/2025 EXAM REVIEW) WGU C239 Exam Review. Easy Mastery. Verified. Sec 351 - -Three requirements

WGU C239 Exam Review. Easy Mastery. Verified. Sec 351 - -Three requirements: ferror transfers for property 2. Solely in exchange for the corporation stock 3. Have to have control immediately following transaction Control of 80% of (combined voting and nonvoting) each voting stock and nonvoting stock Not valid with transferring in service and does not get considered in terms of control for Sec 351 eligibilty for that trnasferror. However, if this persons contribution dilutes the control, then any gain on tranferring would be taxed to all shareholders. The transferrer transferring services could transfer property at least 10% of the FMV of the stock being received. This will prevent the gains being recognized at transfer. Boot rule - -Recognized gain is the lesser of: Transferrors realized gain or FMV of the boot received Boot received in a Sec 351 transaction never causes a recognition of loss. Sec 351 transactions when liabilities are transferred - -Transferring something other than property, so there are exceptions to liabilities being boot which is not normal. Sec 357(c) =recognized gain is the excess of liabilities transferred to the corporation OVER the adjusted basis of all properties transferred. Liability must be a bonafide business debt. Sec 351 transferrors calculator for basis - -Boot rule applies Adjusted Basis of the received share