Leslie transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis
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Leslie transfers land to Newco in exchange for 100% of Newco's stock. The land has a basis of $50, FMV of $100 and is subject to a mortgage of $40.
- What are the consequences to each of the parties?
- Suppose in that the mortgage was placed on the property immediately before the transfer to Newco. Leslie wanted cash in order to buy a yacht to be used for personal purposes, so she took out a mortgage on the land. Would this change your answer?
- Suppose instead that the mortgage was for $60. Suppose further that this mortgage was incurred on the purchase of the property many years ago. Would this change your answer?
- Same as (c) except that Leslie also transfers accounts payable of $10. Leslie is a cash basis taxpayer. How would this change your answer?
Related Book For
Income Tax Fundamentals 2015
ISBN: 9781305177772
33rd Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven Gill
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