TAX 9866 Lecture Notes - Lecture 20: Capital Structure, Preferred Stock
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X basis = - (= boot recd)) + (gain recognized) = . Allocate of boot to each asset based on fmv. *only recognize gain on gain assets not on loss assets. *net built in gain of 25 - recognized = unrecognized gain. Look for built in loss property- if u do have, it will affect corps basis. X forms a corporation. contribute prop fmv 1 million. adj basis of 500k. this goes into the. Corporations hands back 900k of common voting stock + 100k in cash transferred prop to corporation (no built in loss) immediately after trans. do you control it, yes! Corporate basis = adjusted basis + any gain recognized by sh (if any) (* exception: net built in loss, cannot exceed fmv of property but this does not apply here) Sh basis in their stock since ya got boot. 1 mil - 600k= 400 (100 k gain is recognized rn) (100k)
