[Verse 1] Starting up a company, you want to keep it clean Transfer all your property without a tax routine Section three five one can save you from the pain If you meet the rules, there's nothing you will gain Taxable that is, the government won't take When you form your corp, no money's at stake [Chorus] Eighty percent control, that's the magic number Keep it in the club, don't let ownership lumber Boot means cash or debt that breaks the golden rule Recognition follows when you leave the tax-free pool Three five one, three five one Incorporation can be fun When you know the rules to follow Tax-free formation you can swallow [Verse 2] Property goes in and stock comes right back out That's the basic trade that keeps you in the route But if you get some cash or notes upon the side That's called boot my friend, and taxes you can't hide Only to the extent of the gain you made Recognition hits you, that's how the game is played [Chorus] Eighty percent control, that's the magic number Keep it in the club, don't let ownership lumber Boot means cash or debt that breaks the golden rule Recognition follows when you leave the tax-free pool Three five one, three five one Incorporation can be fun When you know the rules to follow Tax-free formation you can swallow [Bridge] Basis calculations keep the numbers straight Your stock takes the place of what you gave away Minus any boot plus any gain you pay Corporation's basis in the assets that it got Equals what you had, that's the basic plot [Verse 3] When the corp assumes your debts that's fine to do Section three five seven guides us safely through Unless you're trying tricks to dodge the tax you owe Tax avoidance purpose makes the whole deal blow Liability relief can trigger gain recognition So be careful with your planning and your disposition [Chorus] Eighty percent control, that's the magic number Keep it in the club, don't let ownership lumber Boot means cash or debt that breaks the golden rule Recognition follows when you leave the tax-free pool Three five one, three five one Incorporation can be fun When you know the rules to follow Tax-free formation you can swallow [Outro] Form your corporation right Keep these rules within your sight Tax-free incorporation Building wealth across the nation
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