Discussion:Sec. 351 Transfer in advance of sale.
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| Revision as of 21:04, 16 August 2006 Dennis (Talk | contribs) ← Previous diff |
Revision as of 01:45, 17 August 2006 MSTguy (Talk | contribs) (I think there wo) Next diff → |
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| {{ForumNewPost|UserID=Dennis|Date=16 August 2006|Text=C Corp operates soft ice cream stand. Balance sheet: Officer loans $90,000 Retained earnings negative $90,000. Carryforward NOL $90,000. ( Fully depreciated) building and land owned separately by sole shareholder. Can building be transferred (in exchange for stock) to and sold by corp to eat carryforward loss?}} | {{ForumNewPost|UserID=Dennis|Date=16 August 2006|Text=C Corp operates soft ice cream stand. Balance sheet: Officer loans $90,000 Retained earnings negative $90,000. Carryforward NOL $90,000. ( Fully depreciated) building and land owned separately by sole shareholder. Can building be transferred (in exchange for stock) to and sold by corp to eat carryforward loss?}} | ||
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| + | {{ForumReplyPost|UserID=MSTguy|Date=17 August 2006|Text=I think there would be a problem here with a Section 482 reallocation. Courts have held that section 482 overrides section 351, and Regs. 1.482-1(f)(1) confirm this. The IRS could easily spot this and come in and reallocate the income on sale of the building to the transferee-shareholder in order to more clearly reflect income and prevent evasion of taxes (although I don't think the IRS would argue for evasion of taxes here since burden of proof becomes theirs). }} | ||
Revision as of 01:45, 17 August 2006
Discussion Forum Index --> Tax Questions --> Sec. 351 Transfer in advance of sale.
| 16 August 2006 | |
| C Corp operates soft ice cream stand. Balance sheet: Officer loans $90,000 Retained earnings negative $90,000. Carryforward NOL $90,000. ( Fully depreciated) building and land owned separately by sole shareholder. Can building be transferred (in exchange for stock) to and sold by corp to eat carryforward loss? | |
| 17 August 2006 | |
| I think there would be a problem here with a Section 482 reallocation. Courts have held that section 482 overrides section 351, and Regs. 1.482-1(f)(1) confirm this. The IRS could easily spot this and come in and reallocate the income on sale of the building to the transferee-shareholder in order to more clearly reflect income and prevent evasion of taxes (although I don't think the IRS would argue for evasion of taxes here since burden of proof becomes theirs). | |
