A secret process and patentable inventory both constitute "property" under § 351. Consequently,neither gain nor loss is recognized on the transfer of such "property" to a controlled corporation.

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According to § 351 of the Internal Revenue Code, a transfer of property to a controlled corporation, in exchange for stock in such corporation, is generally not a taxable event. "Property" under this section includes both tangible and intangible property, such as patents and other intellectual property. Therefore, the transfer of a secret process and a patentable inventory to a controlled corporation is not subject to gain or loss recognition.

A Secret Process and Patentable Inventory Both Constitute "Property" Under