Topic Thread

TAX BASIS

  • 1.  TAX BASIS

    Posted 02-26-2015 15:14
    Edited by Holly Coscetta 02-26-2015 15:14
    This message has been cross posted to the following Discussions: NASSAUSUFFOLK and ncCPAp on the GO! .
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    Client purchases stock in a C corporation. The corp only owns one asset which is a building with basis of $400,000.

    Client( silly boy) pays $1.2 milllion for  the stock because that is the FMV of the building.  Anyway before or after he buys the Stock to get the basis in the building to the $1.2 million.  Can an LLC BUY the stock???

    any thoughts?
    516-739-0221
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    Andrew Langus
    CPA
    ANDREW M. LANGUS, CPA
    Garden City NY
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  • 2.  RE: TAX BASIS

    Posted 02-27-2015 19:23

    Andrew:

     

    An LLC can purchase stock, however, that has no impact on the tax issues. On liquidation, a corporation recognizes gain on the difference between the fmv and the adjusted basis of it's assets.

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    Robert Brown
    ROBERT N. BROWN, CPA
    Jericho NY
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  • 3.  RE: TAX BASIS

    Posted 03-01-2015 08:37
    An LLC can buy C corp shares but that does not get a step up in the building.  Your client lost the depreciation deductions - even worse - he will lose the equity equal to the C corp tax on sale of the building.  Consider S election.

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    Robert Barnett
    CPA, ESQ.
    ROBERT BARNETT, ESQ. CPA
    JERICHO NY
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  • 4.  RE: TAX BASIS

    Posted 06-08-2018 14:03
    AS ALWAYS, ROBERT BARNETT'S RESPONSE IS PERFECT. THE C CORP SHOULD CONSIDER "S ELECTION"!!

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    BIG JOHN
    JOHN J PETITO CPA PLLC
    NORTH WOODMERE NY
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