Vanderbilt Law Review


Brian C. Ellis

First Page



Mr. Ellis examines the tax consequences arising when a taxpayer sells appreciated property to a controlled corporation in order to realize a capital gain for himself as well as to increase the basis of the property. He points out the dangers inherent in such a transaction and suggests precautions which should be taken to obtain favorable tax treatment. The author concludes that a taxpayer transferring appreciated property to a controlled corporation may achieve substantial tax benefits because of the relative ineffectiveness of sections 351 and 1239; however, it will be almost impossible for a taxpayer to recognize a loss on the transfer of depreciated property because of section 267.