Instead, the adjusted basis
of the retained intangibles is increased by the unrecognized loss.
Section 357(c), however, requires the taxpayer to recognize a gain when the liabilities the corporation assumes, plus the liabilities on the transferred property, are greater than the property's adjusted basis
197 intangibles, determined by amortizing the intangible's adjusted basis
over 15 years, beginning with the month it was acquired.
To determine the adjusted basis
per share, the total cost of the shares in the group at the time of disposition is divided by the total number of shares in the group.
The deductible loss is limited to the lesser of the (1) property's adjusted basis
or (2) difference between the property's fair market value (FMV) immediately before and after the theft.
Under section 731(a)(1), partners recognize gain on partnership distributions only to the extent the "money" distributed exceeds the adjusted basis
of a partner's interest in the partnership.
It will have to plan for the BIG tax on the difference between adjusted basis
and fair market value (FMV) of the acquired assets in this carryover-basis transaction.
Generally, a building's adjusted basis
is equal to its purchase price less land value, plus capital improvements made, less depreciation taken.
The contract would increase--or index--for inflation the adjusted basis
of certain capital and other assets for purposes of determining the gain or loss on sale.