Frances transfers her business assets (basis of $260,000; FMV of $220,000) to her newly formed corporation, Corporation X, of which she is the majority shareholder. Frances receives 11,000 shares of the new corporation's stock, worth $220,000. Since this is a tax free transaction, she can recognize a deductible loss of $40,000.
Frances transfers her business assets (basis of $260,000; FMV of $220,000) to her newly formed corporation, Corporation X, of which she is the majority shareholder. Frances receives 11,000 shares of the new corporation's stock, worth $220,000. Since this is a tax free transaction, she can recognize a deductible loss of $40,000.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter15: S Corporations
Section: Chapter Questions
Problem 28P
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