Discussion:Stock Basis in a Tax Free Transaction (Sec. 351)
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| Revision as of 01:07, 2 August 2006 Analysisinfs (Talk | contribs) (New Discussion) ← Previous diff |
Revision as of 03:16, 2 August 2006 MSTguy (Talk | contribs) (Be careful Analy) Next diff → |
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| {{ForumNewPost|UserID=Analysisinfs|Date=2 August 2006|Text=Upon incorporating their business the assets and liabilities of the business entered the corporation’s book. Since the liabilities are higher than assets, how would one value the common stock in this transaction? What is the most proper way of showing the difference in the books (The excess liabilities over assets)? }} | {{ForumNewPost|UserID=Analysisinfs|Date=2 August 2006|Text=Upon incorporating their business the assets and liabilities of the business entered the corporation’s book. Since the liabilities are higher than assets, how would one value the common stock in this transaction? What is the most proper way of showing the difference in the books (The excess liabilities over assets)? }} | ||
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| + | {{ForumReplyPost|UserID=MSTguy|Date=2 August 2006|Text=Be careful Analysis - sounds like it could be a code sec 357 case. If liabilities assumed by the corporation exceed the adjusted basis of the property transferred, the transferor has taxable gain, which would give him a step-up in his stock basis. Take a look at IRC 357 before going any further.}} | ||
Revision as of 03:16, 2 August 2006
Discussion Forum Index --> Tax Questions --> Stock Basis in a Tax Free Transaction (Sec. 351)
Analysisinfs (talk|edits) said: | 2 August 2006 |
| Upon incorporating their business the assets and liabilities of the business entered the corporation’s book. Since the liabilities are higher than assets, how would one value the common stock in this transaction? What is the most proper way of showing the difference in the books (The excess liabilities over assets)? | |
| 2 August 2006 | |
| Be careful Analysis - sounds like it could be a code sec 357 case. If liabilities assumed by the corporation exceed the adjusted basis of the property transferred, the transferor has taxable gain, which would give him a step-up in his stock basis. Take a look at IRC 357 before going any further. | |
