A corporation's holding period for property received under § 351 includes the holding period of the transferor shareholder.

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Under § 351 of the Internal Revenue Code, when a shareholder transfers property to a corporation in exchange for stock in such corporation and immediately after the exchange is in control of the corporation, the corporation's holding period for the property includes the period during which the property was held by the transferor shareholder. This rule allows the corporation to "tack on" the transferor's holding period to its own, which can be beneficial for determining long-term capital gains treatment upon a subsequent sale of the property.

A Corporation's Holding Period for Property Received Under § 351