Posted by JHyre in Ohio on May 29, 2003 at 19:27:49:
There is some chance that the IRS would disallow the transaction on “substance over form” grounds…as long as the sale and rents are at market value, no funds are commingled, the rent payments are always made on time, etc, the transaction would likely survive scrutiny. Bear in mind that if > 60% of a C-Corporation’s income is derived from rent, interest and similar types of income, the income could be subject to 60%+ taxes (aka “personal holding company”).
John Hyre