When depreciable property is transferred to a controlled corporation under § 351, any recapture potential disappears and does not carry over to the corporation.

Question

Quizplus · Accepted Answer

When depreciable property is transferred to a controlled corporation under § 351, any recapture potential (such as depreciation recapture under § 1245 or § 1250) carries over to the corporation. This means the corporation may have to recognize this recapture income upon a subsequent disposition of the property.

When Depreciable Property Is Transferred to a Controlled Corporation Under