The Marginal Tax Rate ( Irc Section 351

801 Words Nov 16th, 2015 4 Pages
Elizabeth would recognize the gains received by the corporation and would be taxed at their marginal tax rate (IRC Section 351, n.d.).
Recommendation
Maria and Jason, along with Robert and Elizabeth, must focus first on the initial setup of the organizational structure and the tax consequences on the corporation and individually before addressing the other factors of the organization, which are simple and easily addressed by discussing individual and group objectives. The first point to address is the IRC Section 351 limitation of 80% control of the corporation. Maria nor Jason are interested in decreases their control of the corporation and the best approach is for Robert and Elizabeth to contribute their proposed transactions and being taxed of on the gains at their marginal tax rate. Otherwise, it is best for Robert and Elizabeth to reevaluate their proposed transactions in order minimize the tax consequences. The IRC Section 351 limitation only pertains to an even exchange of property, weather property or cash, for corporate stock and 80% control of the corporation (IRC Section 351, n.d.).
The second factor concerning the corporation is confidentiality and data security. Conversations concerning expansion or other contract details should be conducted during a lunch meeting at a restaurant or Maria, Jason or Elizabeth home office until an agreement is reach on the best location for a general office space. This will also provide a relaxed ambiance for the…
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