IRS PLR: Transfer of Land Rights Qualifies as Tax-Free Transaction (IRC §351)

The IRS has issued a private letter ruling on Section 351 regarding the transfer of land rights by the transferor in exchange for stock of the transferee. The ruling states that: 1) the transfer of land rights by the taxpayer to the transferee corporation in exchange for the transferee’s stock will qualify as a tax-free transaction; 2) no gain or loss is recognized by either the taxpayer or the transferee corporation; 3) the taxpayer’s basis in the transferee stock will equal the basis of the transferred land rights; and 4) the holding period of the stock will include the holding ...