subject to a liability

See: encumber
References in periodicals archive ?
1.1031(b)-1(c) states that consideration received in the form of an assumption of liabilities (or a transfer subject to a liability) is to be treated as "other property or money." When each party to an exchange either assumes the other party's liability or acquires property subject to a liability, in determining the amount of other property or money, consideration given in the form of an assumption of liabilities (or the receipt of property subject to a liability) is offset against consideration received in the form of an assumption of liability (or transfer subject to a liability).
1031 deferred like-kind exchange in which property subject to a liability is transferred in one partnership tax year and property subject to a liability is received in the following tax year, the liabilities are netted for Sec.
Tax practitioners know that if the transfer of property subject to a liability results in gain recognition, there is also a step-up in the basis of the transferred property.
Whenever property subject to a liability is transferred to a corporation, the transferor recognizes gain if the amount of the liability exceeds the adjusted basis of the property transferred.
(In a typical incorporation transaction, there can be no dividend.) If, as part of the transaction, the corporation assumes a liability of the transferor or takes the transferred property subject to a liability, the liability assumed or acquired will be treated as money received by the transferor, thereby reducing basis (Sec.
357(b)), the transferee corporation in a tax-free reorganization can assume a liability or acquire the transferor's property subject to a liability without precipitating taxation under Sec.
On the other hand, if a beneficiary receives property subject to a liability stemming from a DRD item for which the estate is not liable, Regs.
752(c)applies to contributions and distributions of property subject to a liability of the transfer or, and not to the sale or exchange of a partnership interest.