RSM424H1 Study Guide - Final Guide: Joint Venture, Verizon Communications, Tax Deferral
Document Summary
Multiple corporations and their reorganization: corporate reorganizations. Relocating business activities involves the transfer of assets. If fmv exceed the cost, then selling corp incurs taxable income. The same owners continue to conduct the same business but from within a di erent entity-> referred to as a reorganization. Both party have a continuing interest in the combined entity= also reorganization. Corporate reorganization can occur: within a related group, the form of combination and divestitures. May elect a form of transaction that doesn"t result in fmv disposition of asset: basic reorganization techniques. 2. alter the structure-> two or more corps into one corp. > have same result, but long-term tax implication may di er: asset transfer. Involve an actual sale of property: deemed equal to the fmv, elect an agreed transfer price equals to tax cost. Can use both methods to each asset transferred.
