Tax Code Section 351

Imposition and collection of tax sec a351 001 aadefinitions.

Tax code section 351. E hotel occupancy tax revenue spent for a purpose authorized by this section may be spent for day to day operations supplies salaries office rental travel expenses and other administrative costs only if those administrative costs are incurred directly in the promotion and servicing expenditures authorized under section 351 101 a. Tax code title 3. B the rate in an eligible central municipality may not exceed nine percent of the price paid for a room.

351 c 1 in general in determining control for purposes of this section the fact that any corporate transferor distributes part or all of the stock in the corporation which it receives in the exchange to its shareholders shall not be taken into account. In 1997 congress amended section 351 to exclude the receipt of nonqualified preferred stock from non recognition. If a municipal or other public or private entity that conducts an activity authorized under this section conducts other activities that are not authorized.

Local hotel occupancy taxes chapter 351. No gain or loss shall be recognized if property is transferred to a corporation by one or more persons solely in exchange for stock in such corporation and immediately after the exchange such person or persons are in control as defined in section 368 c of the corporation. Internal revenue code section 351.

Section 351 a is intended to apply to certain transactions where gain or loss may have accrued in a constitutional sense but where in a popular and economic sense there has been a mere change in the form of ownership and the taxpayer has not really cashed in on the theoretical gain or closed out a losing venture. Whether you re setting up a new corporation with just yourself or other people such as partners in a partnership or getting involved in an existing corporation under irc section 351 a you can defer put off any resulting tax consequence. A version of section 351 has been included in the internal revenue code since the revenue act of 1921 2 in 1989 congress amended section 351 to repeal non recognition treatment for securities received by a transferor in the exchange.

Irc section 351 a broad rule applying to corporations generally defers from taxation any gain or loss incurred on property transferred to a corporation in exchange for stock. A except as provided by this section the tax authorized by this chapter may be imposed at any rate not to exceed seven percent of the price paid for a room in a hotel. 1 aa municipality includes any incorporated city town or village.

Transfer to corporation controlled by transferor. Of the internal revenue code of 1986 occurring after such date. Local taxation subtitle d.