Exchange Real Estate for Company Shares
My 501(c)7 (a "hunting and fishing club") sales shares in the club to raise money to purchase properties for use by the share holders. There are a couple of shareholders or potential shareholders who would like to turn over their real estate holdings to the club in exchange for shares in the club. After such an exchange, the two would control more than 80% of the club. Is such an exchange allowed (perhaps under Section 351?) without tax consequences? If so, Is there a "holding period" during which the two shareholders may *not* sale their shares in whole or in part? In other restrictions or reporting requirements following such an exchange?
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