Briefly describe the income tax benefit they could receive

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Question: "Kirk and Jared each own sole proprietorships that are health and fitness training centers, and they are making plans to combine their businesses by forming a corporation in which they would have equal ownership. They think their friend Josh, who also owns a health and fitness training center that is a sole proprietorship, would be interested in joining them. They intend to make a deal with him next week, when he comes back from a significant project that takes him out of town. Kirk and Jared have been advised that they should form a corporation in a transaction that qualifies under Section 351. 1. Briefly describe the income tax benefit they could receive from a transaction that qualifies for Section 351. 2. Describe 2 things they might do, or avoid doing, in order to maximize the benefits of Section 351 in their situation.

Reference no: EM133615016

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