As a general rule, the transfer of property by a sole shareholder to a corporation in exchange solely for stock does not result in a taxable transaction.

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This is known as a "Section 351 exchange" and is generally tax-free under the Internal Revenue Code. However, there are certain conditions that must be met, such as the shareholder receiving at least 80% of the corporation's stock and not receiving any other property or boot (cash) in the transaction.

As a General Rule, the Transfer of Property by a Sole