[rzrbkfaith]

Okay, I have seen several people asking for a summary of basis for REG, so as part of my final review, I thought I would post some of my notes. I will post them periodically today and tomorrow.

Shareholder Initial Basis:

Adj basis of prop transferred (including cash)

+ FMV of services

+ Gain recognized by shareholder

– Cash received

– Liabilities assumed by corp

– FMV of nonmoney boot received (i.e. bonds/debt securities)

= Basis of Common Stock

Note: A contribution of 80% must be made to qualify for a non-taxable transaction

Taxable transaction – Property transferred at FMV

Services do NOT count towards the 80% contribution

Initial Basis – Corporation

The greater of shareholder’s basis in property (NBV + gain recognized) or debt assumed

AUD - 99
BEC - 97
REG - 91
FAR - 1/8/16