The effective date of this election will be the day before the effective date of the deed transfer of the warehouse from corporation to LLC, Inc., so that the warehouse transfer to LLC, Inc., can be treated as an I. If one or more people contribute property to a corporation solely in exchange for stock in that corporation, and immediately after the exchange the person(s) own more than 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation, then neither the corporation nor the contributing person(s) will have a tax liability from that exchange. Neither the corporation nor LLC, Inc., will have a tax liability from the exchange.

In this plan, after the C corporation election by the LLC, the corporation will contribute the warehouse into LLC, Inc., solely in exchange for LLC, Inc., stock. The corporation will effectively contribute itself into LLC, Inc.

This information is essential because the tax liability of corporation and shareholder is based on the gain recognized from the liquidating distributions.

liquidating all-85

Other distributions of property will increase the shareholder’s stock basis by the gain recognized in the distribution and decrease shareholder’s stock basis by the fair market value of the property received in the distribution.

The cash distribution will only decrease the shareholder’s stock basis by the amount of cash distributed.

When a corporation distributes an asset to a shareholder, the shareholder’s stock basis increases by the gain recognized in that distribution and decreases by the fair market value of the asset being distributed.

unless the liquidation is part of a reorganization plan, gain or loss is recognized to a liquidating corporation upon the distribution of property in complete liquidation as if the property were being sold to the distributee at its fair market value.

— By effectively contributing the corporation to LLC, Inc., solely in exchange for LLC, Inc., stock, instead of just distributing the warehouse to shareholder or another LLC, we are able to avoid the adverse tax consequences of I. This will leave the corporation as an existent business entity but with no assets. This plan may be beneficial if the shareholder has enough corporation stock basis so that no gain is recognized on the distribution of the cash and the warehouse, but does not have enough basis to avoid recognition of gain on the distribution of the note.

The shareholder’s basis in the LLC, Inc., stock will be the purchase price of the stock. that it transferred to LLC, Inc., in exchange for the stock, exceeds the purchase price in the sale to shareholder. — As previously described, the contribution of the note will not result in gain being recognized by either LLC2, Inc., or the corporation. LLC3, Inc., will then elect to be treated as an S corporation. C., a “small business corporation” is a domestic corporation that meets certain statutory criteria.The precise tax consequences to the corporation and its sole shareholder are not possible to know without knowing the fair market values and basis of the corporation’s assets.The corporation will recognize gain to the extent that its basis in the LLC, Inc., stock, which is the basis of the warehouse, as adjusted by I. The gain recognized, if any, will be capital gain and, because we are not selling or exchanging the warehouse (we are selling stock, which is nondepreciable property), in the entity that owns the warehouse, we can avoid I. After the contribution, the corporation will sell its LLC2, Inc., stock to the shareholder, and the shareholder will then be the 100 percent owner of LLC2, Inc., the owner of the note. After LLC3, Inc., becomes an S corporation, it will file IRS Form 8869 (Qualified Subchapter S Subsidiary Election) and elect to treat the corporation as a qualified subchapter S subsidiary (QSUB) of LLC3, Inc., which effectively liquidates corporation in a nonrecognition transaction.By having corporation contribute the note into LLC2, Inc., instead of distributing the note to the shareholder, we avoid the consequences of I. corporation in which 100 percent of the stock of such corporation is held by an S corporation, and the S corporation elects to treat such corporation as a QSUB.After the contribution, the corporation will own 100 percent of LLC, Inc., thus, satisfying the requirements for I. Because we are transferring an interest in an entity, and not an interest in real property, no Florida documentary stamp tax or recording fee above the

The shareholder’s basis in the LLC, Inc., stock will be the purchase price of the stock. that it transferred to LLC, Inc., in exchange for the stock, exceeds the purchase price in the sale to shareholder. — As previously described, the contribution of the note will not result in gain being recognized by either LLC2, Inc., or the corporation. LLC3, Inc., will then elect to be treated as an S corporation.

C., a “small business corporation” is a domestic corporation that meets certain statutory criteria.

The precise tax consequences to the corporation and its sole shareholder are not possible to know without knowing the fair market values and basis of the corporation’s assets.

The corporation will recognize gain to the extent that its basis in the LLC, Inc., stock, which is the basis of the warehouse, as adjusted by I. The gain recognized, if any, will be capital gain and, because we are not selling or exchanging the warehouse (we are selling stock, which is nondepreciable property), in the entity that owns the warehouse, we can avoid I. After the contribution, the corporation will sell its LLC2, Inc., stock to the shareholder, and the shareholder will then be the 100 percent owner of LLC2, Inc., the owner of the note. After LLC3, Inc., becomes an S corporation, it will file IRS Form 8869 (Qualified Subchapter S Subsidiary Election) and elect to treat the corporation as a qualified subchapter S subsidiary (QSUB) of LLC3, Inc., which effectively liquidates corporation in a nonrecognition transaction.

By having corporation contribute the note into LLC2, Inc., instead of distributing the note to the shareholder, we avoid the consequences of I. corporation in which 100 percent of the stock of such corporation is held by an S corporation, and the S corporation elects to treat such corporation as a QSUB.

After the contribution, the corporation will own 100 percent of LLC, Inc., thus, satisfying the requirements for I. Because we are transferring an interest in an entity, and not an interest in real property, no Florida documentary stamp tax or recording fee above the [[

The shareholder’s basis in the LLC, Inc., stock will be the purchase price of the stock. that it transferred to LLC, Inc., in exchange for the stock, exceeds the purchase price in the sale to shareholder. — As previously described, the contribution of the note will not result in gain being recognized by either LLC2, Inc., or the corporation. LLC3, Inc., will then elect to be treated as an S corporation. C., a “small business corporation” is a domestic corporation that meets certain statutory criteria.The precise tax consequences to the corporation and its sole shareholder are not possible to know without knowing the fair market values and basis of the corporation’s assets.The corporation will recognize gain to the extent that its basis in the LLC, Inc., stock, which is the basis of the warehouse, as adjusted by I. The gain recognized, if any, will be capital gain and, because we are not selling or exchanging the warehouse (we are selling stock, which is nondepreciable property), in the entity that owns the warehouse, we can avoid I. After the contribution, the corporation will sell its LLC2, Inc., stock to the shareholder, and the shareholder will then be the 100 percent owner of LLC2, Inc., the owner of the note. After LLC3, Inc., becomes an S corporation, it will file IRS Form 8869 (Qualified Subchapter S Subsidiary Election) and elect to treat the corporation as a qualified subchapter S subsidiary (QSUB) of LLC3, Inc., which effectively liquidates corporation in a nonrecognition transaction.By having corporation contribute the note into LLC2, Inc., instead of distributing the note to the shareholder, we avoid the consequences of I. corporation in which 100 percent of the stock of such corporation is held by an S corporation, and the S corporation elects to treat such corporation as a QSUB.After the contribution, the corporation will own 100 percent of LLC, Inc., thus, satisfying the requirements for I. Because we are transferring an interest in an entity, and not an interest in real property, no Florida documentary stamp tax or recording fee above the $0.70 minimum should be owed.

||

The shareholder’s basis in the LLC, Inc., stock will be the purchase price of the stock. that it transferred to LLC, Inc., in exchange for the stock, exceeds the purchase price in the sale to shareholder. — As previously described, the contribution of the note will not result in gain being recognized by either LLC2, Inc., or the corporation. LLC3, Inc., will then elect to be treated as an S corporation.

C., a “small business corporation” is a domestic corporation that meets certain statutory criteria.

The precise tax consequences to the corporation and its sole shareholder are not possible to know without knowing the fair market values and basis of the corporation’s assets.

The corporation will recognize gain to the extent that its basis in the LLC, Inc., stock, which is the basis of the warehouse, as adjusted by I. The gain recognized, if any, will be capital gain and, because we are not selling or exchanging the warehouse (we are selling stock, which is nondepreciable property), in the entity that owns the warehouse, we can avoid I. After the contribution, the corporation will sell its LLC2, Inc., stock to the shareholder, and the shareholder will then be the 100 percent owner of LLC2, Inc., the owner of the note. After LLC3, Inc., becomes an S corporation, it will file IRS Form 8869 (Qualified Subchapter S Subsidiary Election) and elect to treat the corporation as a qualified subchapter S subsidiary (QSUB) of LLC3, Inc., which effectively liquidates corporation in a nonrecognition transaction.

By having corporation contribute the note into LLC2, Inc., instead of distributing the note to the shareholder, we avoid the consequences of I. corporation in which 100 percent of the stock of such corporation is held by an S corporation, and the S corporation elects to treat such corporation as a QSUB.

After the contribution, the corporation will own 100 percent of LLC, Inc., thus, satisfying the requirements for I. Because we are transferring an interest in an entity, and not an interest in real property, no Florida documentary stamp tax or recording fee above the $0.70 minimum should be owed.

||

The shareholder’s basis in the LLC, Inc., stock will be the purchase price of the stock. that it transferred to LLC, Inc., in exchange for the stock, exceeds the purchase price in the sale to shareholder. — As previously described, the contribution of the note will not result in gain being recognized by either LLC2, Inc., or the corporation. LLC3, Inc., will then elect to be treated as an S corporation.

C., a “small business corporation” is a domestic corporation that meets certain statutory criteria.

The precise tax consequences to the corporation and its sole shareholder are not possible to know without knowing the fair market values and basis of the corporation’s assets.

The corporation will recognize gain to the extent that its basis in the LLC, Inc., stock, which is the basis of the warehouse, as adjusted by I. The gain recognized, if any, will be capital gain and, because we are not selling or exchanging the warehouse (we are selling stock, which is nondepreciable property), in the entity that owns the warehouse, we can avoid I. After the contribution, the corporation will sell its LLC2, Inc., stock to the shareholder, and the shareholder will then be the 100 percent owner of LLC2, Inc., the owner of the note. After LLC3, Inc., becomes an S corporation, it will file IRS Form 8869 (Qualified Subchapter S Subsidiary Election) and elect to treat the corporation as a qualified subchapter S subsidiary (QSUB) of LLC3, Inc., which effectively liquidates corporation in a nonrecognition transaction.

]].70 minimum should be owed.

.70 minimum should be owed.