REG Question- Corporate Basis in Property Received

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    Topic
  • #2169841
    Emily
    Participant

    This one had me confused for hours…

    Clay, Finch, Lark and Token formed Amber Co., a C Corp. (all contributed property and the combined stock received is 100%)
    Token contributed $10,000 in cash; property worth $40,000 ($5,000 basis), with related liability of $20,000 assumed by the corporation.
    The answer provided states that the corporation’s basis in noncash property received from Token is $10,000, which is the carryover basis of $5,000 plus the $5,000 gain recognized by the shareholder. But shouldn’t the basis be $20,000 since the corporation’s basis in property received should be the greater of NBV+gain recognized by shareholder OR debt assumed by corporation?

    Thanks in advance for your help.

    AUD - 83
    BEC - 90
    FAR - 79
    REG - 93
    "Highlight that, now circle it" - Tim Gearty
Viewing 5 replies - 1 through 5 (of 5 total)
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  • #2169979
    Meg
    Participant

    i agree with you. now im confused lol

    AUD - 76

    FAR - 75

    BEC - 79

    REG - 85

    #2170183
    Emily
    Participant

    Unless the debt assumed is reduced by the $10,000 cash contributed by Token… Ugh I wish Becker had a better explanation

    AUD - 83
    BEC - 90
    FAR - 79
    REG - 93
    "Highlight that, now circle it" - Tim Gearty
    #2170186
    Emily
    Participant

    Unless the debt assumed is reduced by the $10,000 cash contributed by Token… Ugh I wish Becker had a better explanation

    AUD - 83
    BEC - 90
    FAR - 79
    REG - 93
    "Highlight that, now circle it" - Tim Gearty
    #2170192
    Emily
    Participant

    Unless the debt assumed is reduced by the $10,000 cash contributed by Token… Ugh I wish Becker had a better explanation

    AUD - 83
    BEC - 90
    FAR - 79
    REG - 93
    "Highlight that, now circle it" - Tim Gearty
    #2170195
    Emily
    Participant

    Unless the debt assumed is reduced by the $10,000 cash contributed by Token… Ugh I wish Becker had a better explanation

    AUD - 83
    BEC - 90
    FAR - 79
    REG - 93
    "Highlight that, now circle it" - Tim Gearty
Viewing 5 replies - 1 through 5 (of 5 total)
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