General Partnerships C and S Corporations Formation Formation of Entities

General partnerships c and s corporations formation

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General Partnerships C and S Corporations Formation Formation of Entities — Entity Perspective No, never. No, never. Does an entity recognize gain or loss on the exchange of an ownership interest for property in a tax-free exchange? Chapter 16, Exhibit 6e
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Cash + debt relief: 1. Tax-free up to outside basis; 2. Capital gain to the extent of excess over outside basis. 3. In-kind property other than cash, debt relief, and inventory: Tax- free S Corps. 1. Tax-free up to the lesser of: AAA Balance Stock Basis 2. Dividend up to accumulated E&P C Corps. 1. Dividend up to current earnings & profits (E&P); 2. Dividend up to accumulated E&P; 3. Tax-free up to What is the owners’ tax treatment for the “amount distributed?” Partnerships C and S Corporations Effect of Nonstock Distributions on Owners exchange (basis carries over). from prior life as a C corporation (if any) 3. Tax free up to any excess of stock basis over AAA balance. 4. Capital gain on remainder. basis in stock 4. Capital gain on remainder Chapter 16, Exhibit 8b
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Effect of Nonstock Distributions on Owners Same as the partnership’s inside basis. [However, if a partner’s outside basis is less than the partnership’s inside basis in property distributed to a partner, then the partner’s basis of property received is taken from his outside basis, not from the Always FMV, even if an owner assumes corporate debt (because the shareholder must recognize gain on the distribution of property). What is the basis of property distributed to an owner? General Partnerships C and S Corporations partnership’s inside basis. This makes sense, given that a partner’s outside basis must be reduced by the “amount” of distributions and that it cannot be negative] Chapter 16, Exhibit 8c
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Effect of Nonstock Distributions on Entities No gain or loss, unless it is part of a disguised sale. In a Gains: Yes (compute gain in the same way as if the Other property (other than its own stock)? No. No. Cash or its own bonds to owners? General Partnerships C and S Corporations Does an entity recognize gain or loss on the distribution of: Chapter 16, Exhibit 9a disguised sale, the partnership’s recognized gain or loss = (a) - (b), where: (a) = FMV of property distributed. (b) = AB of prop. dist’d. property were sold) Losses: No (except in complete liquidation)
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  • Fall '14
  • fabioambrosio
  • Accounting, Business, Taxes, Corporation, Types of business entity, Limited Liability Company, general partnerships

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