Discuss how a taxpayerrsquos tax basis in property received


1.Discuss the difference between gain realization and gain recognition in a property transaction.

2.What information must a taxpayer gather to determine the amount realized in a property transaction?

3.Distinguish between exclusion and deferral as it relates to a property transaction.

4.Discuss how a taxpayer’s tax basis in property received in a property transaction will be affected based on whether a property transaction results in gain exclusions or gain deferral.

5.What information must a taxpayer gather to determine the tax-adjusted basis of property exchanged in a property transaction?

6.Why does Congress allow tax deferral on the formation of a corporation?

7.List the key statutory requirements that must be met before a corporate formation is tax-deferred under §351.

8.What is the definition of control for purposes of §351?  Why does Congress require the shareholders to control a corporation to receive tax deferral?

9.What is a substituted basis as it relates to stock received in exchange for property in a §351 transaction?  What is the purpose of attaching a substituted basis to stock received in a §351 transaction?

10.True or False?  The receipt of boot by the shareholder in a §351 transaction causes the transaction to be fully taxable.  Explain.

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Finance Basics: Discuss how a taxpayerrsquos tax basis in property received
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