c corporation issuing stocks for new shareholders
Posted: 16-Apr-2019 8:45pm
we got a client set up as a LLC and elected as a C corporation to file taxes. Client originally contributed 100k for 100% ownership for the LLC. Recently, the LLC has a new investor to contribute 120k to the LLC (Elected as C corp) for 50% ownership. Does the original shareholder needs to recognize any gain or this is a tax free contribution under IRC 351.