Contribution of Nonbusiness Assets to a Corporation

Authors

Michael K. Reppe, University of Nebraska College of LawFollow

Abstract

I. Introduction … A. Reasons for Incorporating Nonbusiness Assets … 1. Tax Advantages … 2. Other Advantages

II. Risks of Incorporating Nonbusiness Assets … A. Corporate Risks … 1. Denial of Depreciation and Other Expenditures … 2. Special Rules of Section 274 … 3. Denial of Loss Deductions … a. The Implied “Trade or Business” Test … b. “Substance over Form” … c. Section 183… B. Shareholder Risks … 1. Tax Advantages … a. Constructive Dividend Income … b. Loss of One-Time Gain Exclusion from Sale of Principal Residence … 2. Non-tax Disadvantages

III. Minimization of Risks

IV. Conclusion

Recommended Citation

Michael K. Reppe, Contribution of Nonbusiness Assets to a Corporation, 58 Neb. L. Rev. 826 (1979)
Available at: https://digitalcommons.unl.edu/nlr/vol58/iss3/9