The shareholder contributing property (not services) in
exchange for corporation common stock has no gain or loss if the following two
conditions are met
1. 80% Control Immediately after the transaction the s/h involved must own at least 80% of the voting AND non-voting stock.
2. boot not received i.e. cash withdrawn or receipt of debt securities.
**Note: cancellation of debt where liabilties > NBV transferred to corp. is not boot per se but does generate gain.