[kky617]

What is Carryover Basis? What is Carryover Holding Period?

I’m on Page 8-1 of 2013 REG. I think Roger notes in general lacks detailed explanation. Since I am non-accounting major, it is really hard to understand the material with the Roger CPA Review note alone 🙁

Back to my original question, what I understood about the tax-free exchange between corporation-shareholders must meet certain criteria.

First, the transferor/contributor must own 80% or more of cash and/or property of transferee upon the transaction.

Second, the cash/property contribution is under carryover basis of property, meaning no gain or loss will be recognized by both the shareholder and the corporation although the shareholder’s stock basis and corporation’s capital would increase by the stockholder’s contribution.

AND THEN,

Third, the carryover holding period? I know that holding period is the time you own an asset before disposing of it. But, how is it related to the tax-free exchange and carryover basis? I am so confused.

Please help me understand. Thanks

Kay

[Priscilla]

Also, s/h will need to recognized gain/loss if any cash or other than stock is received in exchange for ownership.

AUD - Done
REG - Done
BEC - Done
FAR - August 2015

[Priscilla]

Also, s/h will need to recognized gain/loss if any cash or other than stock is received in exchange for ownership.

AUD - Done
REG - Done
BEC - Done
FAR - August 2015

[CPA soon]

Contributions are always recorded at net book value, so the basis of the shareholder carries over to the corporation the general rule is tax free=NBV, taxable=FMV. If there is a liability on the property and the liability (mortgage) is bigger than the basis, the contribution is then recorded as the basis equating the amount of liability.

When the shareholder has a gain they can recognize up to the amount of boot they receive.

I am confused about your last question.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

Contributions are always recorded at net book value, so the basis of the shareholder carries over to the corporation the general rule is tax free=NBV, taxable=FMV. If there is a liability on the property and the liability (mortgage) is bigger than the basis, the contribution is then recorded as the basis equating the amount of liability.

When the shareholder has a gain they can recognize up to the amount of boot they receive.

I am confused about your last question.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

Ownership of 80% or more, no gain is recognized. And the dividend received deduction is another thing to keep in mind when looking at ownership percentage.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

Ownership of 80% or more, no gain is recognized. And the dividend received deduction is another thing to keep in mind when looking at ownership percentage.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

FYI you can't schedule your AUD section in March lol, No exams in March.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[CPA soon]

FYI you can't schedule your AUD section in March lol, No exams in March.

FAR - 71, 68, 74, (8/31/14) 78 ✔
REG - 67, 71, 71, (10/18/14) 78 ✔
BEC - (11/29/14) 86 ✔
AUD - 73, (4/4/15) 86 ✔

I can't believe this is over! 2 years and 3 months..

[Author]

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