IRS Publication 542 — Corporations
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“If the corporation does not pay a required installment of estimated tax by its due date, it may be subject to a penalty. The penalty is figured sepa- rately for each installment due date. Therefore, the corpo- ration may owe a penalty for an earlier due date, even if it paid enough tax later to make up the underpayment. This is true even if the corporation is due a refund when its re- turn is file…”
If you transfer property (or money and property) to a corporation in exchange for stock in that corporation (other than nonqualified preferred stock), and immediately afterward you are in control of the corporation, the exchange is usually not taxable. This rule applies both to individuals and to groups who transfer property to a corporation. It also applies whether the corporation is being formed or is already operating. It does not apply in the following situations.
• The corporation is an investment company.
• You transfer the property in a bankruptcy or similar proceeding in exchange for stock used to pay creditors.
• The stock is received in exchange for the corporation's debt (other than a security) or for interest on the corporation's debt (including a security) that accrued while you held the debt.
See Property Exchanged for Stock in chapter 2 of Pub. 544 for more information.
Publication 542 (1-2024) 3
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