Subchapter C Part III - Corporate Organizations and Reorganizations

Question 1

Subpart A - Corporate Organizations

Answer 1

351

Question 2

Transfer to Corporation Controlled by Transferor

Answer 2

351
No g/l recognized for transferor if:
(1) One or more persons transfer property
(2) Solely in exchange for Corp stock
(3) Immediately after exchange, transferors control corporation (80%)

Gain recognized in amount of boot; no loss recognized

Services and certain indebtedness by Corp not counted as property

Nonqualified preferred stock does not count as stock.

Other exceptions

Question 3

Subpart B - Effects on Shareholders and Security Holders

Answer 3

354-358

Question 4

Exchanges of Stock and Securities in Certain Reorganizations

Answer 4

354
No gain or loss recognized to SH if stock is exchanged for stock in the course of a reorganization.

Question 5

Distribution of Stock and Securities of a Controlled Corporation

Answer 5

355

Question 6

Receipt of Additional Consideration

Answer 6

356

Question 7

Assumption of Liability

Answer 7

357
Liabilities assumed by another generally not boot but will reduce basis of property obtained; liability in excess of basis will be gain.
Nonrecognition ignored if principal purpose of assumption was tax avoidance.
Gain to extent liability exceeds basis.
Other exceptions.

Question 8

Basis to Distributees

Answer 8

358
Basis of property received is substituted basis less value of boot and adjusted for any g/l; Basis of other property is that party’s FMV.

Liability of transferor assumed by another is treated as money received.

Other Exceptions

Question 9

Subpart C - Effects on Corporations

Answer 9

361-362

Question 10

Nonrecognition of Gain or Loss to Corporations; Treatment of Distributions

Answer 10

361

Question 11

Basis to Corporations

Answer 11

362
Basis in property received in exchange is transferor’s basis increased by any gain recognized by transferor.

If property received has built in loss, basis limited to value of property. An election can have this apply to the transferor rather than the transferee.

Question 12

Subpart D - Special Rule Definitions

Answer 12

367-368

Question 13

Foreign Corporations

Answer 13

367

Question 14

Definitions Relating to Corporate Reorganizations

Answer 14

368
Defines control as 80% of voting power and 80% of all other classes of stock.

Reorganization means (1) Statutory merger or consolidation