far i dont have the cram but the home study but look at beginning of corporation and partnership for basis.
1. for corporation, if its a taxable transaction e.g there will be a gain u use the fmv as the basis to calculate.
also note that when its only a transfer of property its non taxable and u should use the adjusted basis for the calculation and if cash or liability is greater than the adjusted basis then recognize a gain.
also if the property is appreciated then also recognize gain for the shareholders bcos its like the corpn sold it to he shareholder.
2. for partnership, u usually use the adjusted basis bcos most of the time its just a transfer of property whichj is non taxable.
in partnership u r usually asked to calculate basis and u only use the adjusted basis to compute.
a tip is that u see the basis as a capital account or liability account that is a stock basis or debt basis so accordingly u decrease by liabilities given up and increase by liabilties u assumed X a % and decrease by any distributions of cash or property to u the partner . also note that no loss can be recognized for non liquidating, but for a complete liquidation u recognize loss..
if u have wiley u check the beginning and middle for partnership and beginning i think for corporate.
if X assumes yr liability its looked as boot recieved and boot received is a decrease in basis.
but an addition in calculating a gain just like in property transactions.
well confirm with others if i made a mistake. bcos i am typing this real fast….
i pray we pass
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