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Why does it not qualify under 351?
Caroline-91970 - 06/1/2019, 10:36 pm

Is it because it's preferred stock he receives in exchange or is it because it's repayment for a loan?

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RAIN - 06/15/2019, 6:10 pm

Section 351 is for a transfer of property to a corporation in exchange for stock when immediately after the transfer the person is in control of the corporation (owns 80% of stock). Jake did not transfer any property in this example, he receives some shares in addition to the 80% he already owns.

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