Jeff (cash method) will incorporate his bike shop: FMV Tax Basis Book Basis Cash $200,000 $200,000 $200,000
Question:
Jeff (cash method) will incorporate his bike shop:
|
Liabilities (Accounts Payable): $50,000
AND: a bank loan of $500,000 on the building (all business purpose)
BOTH liabilities were transferred to the new corporation.
1.
A: What is his realized gain/ loss?
B: What are his recognized gain/ loss without Section 351?
C: What are his recognized gain/ loss with Section 351?
2.
A: What is Jeff’s basis in his new stock assuming Section 351 was used?
B: What is the Corporations basis in its new assets and liabilities assuming Section 351 was used?
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson