[joonpark1212]

Hello all,

In section 351 where the shareholders recognize the ‘GAIN’ when they receive boot or have net liabilty excess of basis. Would like to ask if this is a capital gain or and ordinary gain. The book never clarifies it. Also, where would this figure be inserted in form 1040?

Your knowledge will be greatly appreciated. Thank you!

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[Mike J]

I believe that is a capital gain situation.

I'm not sure, but I believe it's reported on line 13 of Form 1040 for Capital Gain <loss>, using Form 8949 and Sch D.

I'm not confident in those answers, tho.

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[joonpark1212]

@mike030882
Thank you! Im assuming it would be a capital gain situation. Just dont understand why the review books wont mention it as a capital gain while they do with other parts of the materials. Maybe the exam isnt asking further details on it…

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[Skynet]

Section 351 is when a guy trades in his current girlfriend for a Hotter one after getting his CPA.

As for the “Boot” be ready for it from the old girlfriend, but im return you upgraded to a hotter one : )

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[Author]

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