John plans to transfer the assets and liabilities of his business to Newco in exchange for all
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John plans to transfer the assets and liabilities of his business to Newco in exchange for all of Newco’s stock. The assets have a $250,000 basis and an $800,000 FMV. John also plans to transfer $475,000 of business related liabilities to Newco. Under Sec. 357(c), can John avoid recognizing a $175,000 gain (the excess of liabilities over the basis of assets transferred) by transferring a $175,000 personal promissory note along with the assets and liabilities?
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Yes John can avoid recognizing the 175000 gain according to Ninth Circuit ...View the full answer
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Ali Khawaja
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Related Book For 
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
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