Journal Issue:
Agricultural Law Digest: Volume 24, Issue 12
Agricultural Law Digest: Volume 24, Issue 12
No Thumbnail Available
Volume
Number
Issue Date
Journal Title
Journal ISSN
Journal Volume
Journal Volume
Articles
Publication
Indebtedness in Excess of Basis: A Problem Even for Gifts
(
2013-06-07)
It is widely understood that indebtedness in excess of income tax basis is a problem in sales or exchanges of property.1 For example, taxable gain is recognized to the extent the sum of liabilities assumed or taken subject to by a corporation exceeds the aggregate basis of assets transferred in a tax-free exchange on formation of the corporation.2 That result can arise in connection with an installment sale,3 or about any other “sale or exchange” in addition to an otherwise tax-free exchange to a corporation, as noted.4 Transfers involving partnerships are subject to a somewhat different set of rules.5 What is less widely known is that the same result can occur with a gift.6
Publication
Cases, Regulations and Statutes
(
2013-06-07)