Dealer Status question - Posted by Tim Jensen

import · February 25, 2001, 9:01pm

Posted by JHyre in Ohio on February 26, 2001 at 13:32:01:

nt

import · February 25, 2001, 9:01pm

Posted by Tim Jensen on February 25, 2001 at 22:01:28:

Hi all,

I just have a quick question. As I posted earlier, I am planning on putting a good number of my properties into my corp. I would sell them to the corp then take back a demand mortgage with interest only payments. My question is this.

If I sell all my properties to my corp at once am I running the risk of the IRS label all those sales as “DEaler” sales. Thus having to pay taxes on capitial gains before I get the money.?

Thanks

import · February 26, 2001, 12:09pm

Re: Dealer Status question - Posted by Rick Vesole

Posted by Rick Vesole on February 26, 2001 at 13:09:25:

I believe that you can contribute the properties to the corp tax free under Section 351 in exchange for stock. Your basis in the property becomes the corporations basis in the property. Check with your accountant on this - I may not have all the details correct.

import · February 26, 2001, 12:10am

Re: Dealer Status question - Posted by Bud Branstetter

Posted by Bud Branstetter on February 26, 2001 at 01:10:30:

Maybe the attorney meant that you should sell in exchange for an interest in the corporation. Issue some more stock to facilitate the sale. I don’t think he meant sell for cash in which case the IRS would deserve their piece. If you keep the investment property in the S corp and do not contaminate it with ones you turn over quickly I don’t see a problem.