Scribd Logo
Upload

Welcome to Scribd!

  • FORMATION and Property Is Distributed Corporations

    Uploaded by

    yaoming1326
    5 views1 page
    When property is contributed to a corporation or partnership, no gain or loss is recognized. For corporations, the corporation takes a basis equal to the greater of the contributor's basis or debt assumed, and the contributor's stock basis equals their contribution basis plus any recognized gain. For partnerships, the partnership and contributing partner take the same carryover bases as the contributor. When property is distributed from the business, corporations use fair market value basis while partnerships use net book value basis.

    Original Description:

    Original Title

    Basis

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    When property is contributed to a corporation or partnership, no gain or loss is recognized. For corporations, the corporation takes a basis equal to the greater of the contributor's basis or debt assumed, and the contributor's stock basis equals their contribution basis plus any recognized gain. For partnerships, the partnership and contributing partner take the same carryover bases as the contributor. When property is distributed from the business, corporations use fair market value basis while partnerships use net book value basis.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    5 views1 page

    FORMATION and Property Is Distributed Corporations

    Uploaded by

    yaoming1326
    When property is contributed to a corporation or partnership, no gain or loss is recognized. For corporations, the corporation takes a basis equal to the greater of the contributor's basis or debt assumed, and the contributor's stock basis equals their contribution basis plus any recognized gain. For partnerships, the partnership and contributing partner take the same carryover bases as the contributor. When property is distributed from the business, corporations use fair market value basis while partnerships use net book value basis.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    FORMATION and property is distributed Corporations -no gain/loss recognized -basis is greater of basis + any gain recognized by shareholder

    OR debt assumed by corporation Shareholder -gain recognized to extent of boot or cancellation of debt. -basis in the stock would be basis of transferred property + gain recognized - cash received - liabilities assumed. basically the basis stays the same but if liabilities exceed basis, then the negative difference is gain and you have to bring the basis to zero. Partnership -no gain/loss recognized -partnership basis in the property is the same as partner's basis when it rolled over. -partner's basis in the partnership is the basis of the property minus the liabilities assumed BY the other partners (corporation you subtract the entire liability).

    And when property is distributed from business to indivisual, corporation uses FMV and partnership uses NBV. to show in numbers: 1)individual transfers property with basis 30 business gives individual 20 cash

    corporation basis in property 50 shareholder basis in stock 30 partnership basis in property 30 partner basis in partnership 10

    You might also like