Video: Property Acquired by Corporations

In this lesson, Nick Palazzolo, CPA, breaks down the intricacies of property acquisition by corporations, highlighting the key distinctions between purchasing property and receiving contributions of property from shareholders. He clarifies how contributed property becomes an asset of the corporation and no longer belongs to individual shareholders, and delves into the tax implications, particularly addressing the concept of gain or loss recognition for the corporation and contributing shareholders. With practical examples, such as the acquisition of land by ABC Corporation or the contribution of equipment by a shareholder named John, Nick ensures a comprehensive understanding of how a corporation's basis in different properties is determined, including scenarios involving debts associated with assets. Illustrating these concepts with calculations and outlined conditions such as the 80% control requirement, this lesson is a deep dive into the nuances of corporate transactions and their tax consequences.