Han transferred land he held as an investment to his corporation in a section 351 transaction.Han had held the land for two years prior to the transfer.Han's holding period in the stock he received in the exchange includes the period for which he held the land before transferring it to the corporation.

Question

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According to Section 1223(1) of the Internal Revenue Code, the holding period of property transferred in a Section 351 transaction is added to the holding period of the stock received in the exchange. Therefore, Han's holding period in the stock would include the two years he held the land before transferring it to the corporation.

Han Transferred Land He Held as an Investment to His