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In this case a received boot in a sec35 wualifies transfere. The realized gain on the stock would not be recognized . however the realized gain on boot would be recognisesd to he extent of realized gain or fmvof boot whichever is lesser.Therefor a recognizes gain to the lextent of boot under code sec535110 Jennifer transfers properties to Mump Co. in an exchange that meets all the requirements of Code Sec. 351. Several of the properties have liabilities, which also are transferred to the corporation. Will thetransfer of the liabilities cause gain recognition for Jennifer?In the given situation j transferred her property to m corporatin fr the exchange of the stock of m corp. the exchange between m corporation and j meet esec351. The gain on the transfer of property to m corporation is received by her.There were some liabilities on the property those liabilities weee also transferred fby her to m corp and this was dually accepted.No the gain on the transfer is not to be recognized by j on the transfer up to limit of boot received .If the total amount of the liabilities transferred is mor e than the amount of the value of the property in that case the excess amount of liabilities is to be gain, not he boot..But if the liabilities transferred is for he purpose of tax evasion the in this case the amount of gain shall be treated as a boot on the account of j and it will be taxed. The basis of the stock received by j shall be the properties basis plus any recogniesd gain less any boot if received lbby j.11 What is the basis in a shareholder’s stock after a Code Sec.351 exchangeBasis in shareholders stock after a code sec351 exchange whenhtere is not boot is the adjusted basis of the property trnasfered.Incase of boot Basis of property transferred xxxxxLess boot received xxxxxAdd gain recognized xxxxShareholders basis in stock12 What is the corporation’s basis in property received under Code Sec. 351?Basis in the property received by the corporation under code sec 351 is calculatedIs calculated as follows Shreholders basis in assets transferred.
Add: gains recognized by shareholder on the exchange.Basis in property relocated is not affected by the liabilities adopted or assumed by te corporation, however if liabilities exceed basis of the property transferred, it will be treated as boot gain is tto be recognized to the amount of liabilities surpassing property’s basis.Hence this will result in amplifyin basis in property received by corporation.13 Mara transferred assets to Con Co. on May 15, 2018. Mara acquired the assets on June 15, 2015. Whatis Con Co.’s holding period for the assets?The assets was purchased in 2018, so holding period begins in the same year purchased.14 Is there any depreciation recapture under a Code Sec. 351 exchange?