Tax-Free Contributions under I.R.C. Section 351 for S Corporations and C Corporations Checklist

Summary

This checklist provides a general overview of key requirements for structuring a tax-free contribution of property to a C or S corporation under I.R.C. Section 351. This checklist addresses the following: (1) the business purpose requirement, (2) whether property is transferred, (3) determining what constitutes "property," (4) whether the transferee corporation qualifies for tax-free transfers, (5) whether stock is received in exchange for the property, (6) whether transferors are in control of the corporation immediately after the transfer, (7) whether any transferors or the transferee corporation recognizes gain in the transaction, (8) whether step transaction principles under I.R.C. Section 351 apply to disqualify the transaction as a tax-free contribution, and (9) applicable filing requirements for a valid Section 351 contribution.