TAX 9866 Lecture Notes - Lecture 11: Net Operating Loss, Section 301 Of The Trade Act Of 1974, General Partnership
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[section 1060 asset allocation rules will be tested] If corporation or individual buys stock, they just go out and buy it (taxable transaction) Give property & buy stock back, absent 351 (this is taxable) Basis in stock = amount i paid for it, or the fmv of property i gave up to receive the stock. If i go out and buy stock, simply put, it"s a taxable transaction. X goes out to buy 100 shares, pay /s= m basis in those shares. Corporation standpoint: has anything changed inside corp (no!) No new transaction for corp; they just sold stock. However, they could potentially sell their own stock (in which case corp recognizes no g/l on issuance of its own stock/note) [1032] Also no change to e&p (s301: changes in ownership do. Nothing happens in a taxable stock transaction: With unlimited life, makes sense that nothing happens when stock changes hands.
