Similar to like-kind exchanges, the receipt of "boot" under § 351 can cause gain to be recognized.

Question

Quizplus · Accepted Answer

Boot received under § 351 refers to any non-qualifying property received by a shareholder in a transfer of property to a corporation in exchange for stock. The receipt of boot can result in gain recognition to the extent of the fair market value of the boot received. This is similar to the treatment of boot in like-kind exchanges where the receipt of boot may trigger gain recognition.

Similar to Like-Kind Exchanges, the Receipt of "Boot" Under §