WebSection 351 Issues • Special rule for investment companies Under Treasury Regulations Section Regulation Section 1.351-1(c)(1), a transfer of property will be considered to be a transfer to an “investment company” if— oThe transfer results, directly or indirectly, in diversification of the 7 transferors' interests, and oThe transferee is (a) a regulated … http://archives.cpajournal.com/2002/1002/features/f104002.htm
26 CFR § 1.1502-80 - Applicability of other provisions of law.
Web(For purposes of this Report, a Section 351(e) 80 Percent Corporation, RIC, or REIT is a “Section 351(e) Investment Company”).16In determining whether a corporation is a Section 351(e) 80 Percent Corporation, stock and securities in a subsidiary are disregarded and the parent is deemed to own its ratable share of the subsidiary’s assets if the … WebOct 1, 2024 · The primary difference between the two sections is that IRC section 351 requires that the transferor (and any other person in the transferor’s “control group”) control the buyer immediately after the contribution in order to qualify for nonrecognition treatment. rcschools online
Transfers to Investment Companies: Pitfalls of Secs. 351 And 721
WebThe transferors of the property to the corporation are considered in “control” of the corporation if they, as a group, own at least (A) 80% of the combined voting power of all classes of stock entitled to vote, and (B) 80% of each class of nonvoting stock.7It is permissible for some transferors to receive voting stock while others receive … WebThis section requires that the members contributing to the property possess 80% of the voting power and 80% of shares of all other classes of stock issued by the corporation. … WebThe current test for entitlement to section 351 is that immedi-ately after the exchange, the transferors own at least 80% of the voting stock and 80% of the total number of all other classes of stock. 5 . The traditional rationale for section 351 is that transfers satisfying the control requirement involve only a change in form rcs chat meaning