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arushi_13
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Joined: 09 Feb 2008
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Posted: 07 Jul 2009 at 20:50 \| IP Logged

ms500 wrote:

Hi Arushi

I Agree with your explanation,but as per the explanation of item # 4 in following link states that- no stock may be given in exchange for future services, but in this case, Roosevelt has already performed services

http://books.google.ca/books?id=Jflfus8Vg88C&pg=PA141&am p;am p;am p;lpg=PA141&dq=section+351+tax&source=bl&ots=ltX 2LlBf55&sig=KGNdx41BX8FArBMBwHThqNlifU4&hl=en&ei =WtNTSvGLFYfCNaes_ekI&sa=X&oi=book_result&ct=res ult&resnum=6

Arushi, still it is unclear, appreciate if you go thru abv link, may be my interpretation is wrong

Thanks

ms500 I went through the above link. I m not sure why they say future services. This is because stock issued for any kind of services DOES NOT qualify for Section 351.To qualify for Section 351 when the corp. recognizes no gain or loss on the transfer and takes the greater of adjusted basis or liability assumed to be its BASIS( unless the case of built in losses) the following must be met:
1) The transfer must consist of property. The term property is however not defined. 2) transfer must be solely in exchange of stock 3) transferors must be in control immediately after the exchange.

Here, Roosevelt does not meet 1. So he is excluded from considering the ownership test. Rest of the two transferors DO NOT meet 3).

Hope if helps in someway. Let me know if its still not clear.

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arushi_13
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Posted: 07 Jul 2009 at 20:53 \| IP Logged

ms500 wrote:

Hi Bryris / Arushi

I agree with the concept of 80%, but this services rendered has confused me, May be reading too much or refering other materials gives more confusion

Anyway, In conclusion, now future promises or services already rendered should be excluded, right

Pls confirm abv

thanks

Yes you are right. I would definitely suggest concentrating on one material and do as many revisions as possible from the same one.Too many authors books just confuses you...Again this is just my 2 cents...

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ms500
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Posted: 07 Jul 2009 at 21:15 \| IP Logged

Hi Arushi

many thanks for clarifying in detail. I know, I have to stick to one material, but , this 74 is forcing me to refer different materials, and I don't want to see this 74 again

Bryris / Arushi- Wish you all the best for yr exam

once again, thanks for clarifying the concept

tks

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arushi_13
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Posted: 07 Jul 2009 at 22:36 \| IP Logged

Thanks ms500. Good luck to you too. Don't worry you won't just hang in there:)

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