Upon further review, I need to apologize to the users of Steemit, the advice posted in my original article is incorrect and will be deleted. I will leave this posting up so that the correct interpretation of the law can be found. Courtesy of /u/deeyanda: " read that to mean the cost basis is increased by the amount of gain the transferor recognizes on the transfer. As I understand it, in a 351 exchange, the transferor recognizes zero gain, but instead defers recognition until the corporation sells the asset. However, if the corporation also gives the transferor other property or money in addition to stock, the transferor recognizes a gain in the amount of the value of the non-stock property or money. 351(b). (b) Receipt of property If subsection (a) would apply to an exchange but for the fact that there is received, in addition to the stock permitted to be received under subsection (a), other property or money, then— (1) gain (if any) to such recipient shall be recognized, but not in excess of— (A) the amount of money received, plus (B) the fair market value of such other property received; and (2) no loss to such recipient shall be recognized. Per §362(a), that gain is added to the corporation's basis. Example: Ernie Ethholder buys 100 ETH at $10 apiece, a total basis of $1,000 or $10/ETH. He wants to contribute them to CryptoCorp, his corporation, when ETH is worth $300. He may do it by a 351 exchange, in which he recognizes no gain and the company keeps his basis. Ernie has stock; Ernie pays $0 cap gains; CryptoCorp has 100 ETH at a total basis of $1,000, or $10/ETH. If CC gives E CC stock plus $9,000 E recognizes $9,000 in capital gains; CC has 100 ETH at a total basis of $10,000, or $100/ETH. I am not a tax lawyer, but I deal with tax issues enough to have a rudimentary understanding of them. /u/MoneyMuscles can check the math." I would also like to thank /u/MoneyMuscles, /u/deeyanda, /u/panek, /u/majorpaynei86, and /u/thundergun427 for providing the correct interpretation of the law and being so diligent in their efforts to protect the investors on this subreddit from bad tax advice . I will refrain from posting any other tax advice until I am 100% certain that it is within the confines of the IRC, All of my comments on this post that are incorrect will be deleted so that they do not confuse any other investors going forward.