6 page accounting essay

Liability in a Section 351 Transfer

Sara Sun transferred three properties to Green Construction: an office building, office equipment in that building, and an adjacent parking garage, in a Sec. 351 exchange, as shown in the table below:

attached 

The garage and equipment are free of liabilities, but a $110,000 mortgage remains on the office building. Complete calculations and explain your answers to these questions, referencing all applicable sections of the Internal Revenue Code:

1. If      Green Construction assumes the mortgage, what gains and tax-related      effects would Freeman and Health Innovations sustain?


2. What      if Green Construction does not assume the mortgage? What      gains and tax-related effects would Sara Sun and Green Construction      sustain?

No hard coding of solutions. 

Submission Requirements

• Be      sure to discuss and reference concepts taken from the assigned textbook      reading and relevant research.


• Support      your paper with at least 4-6 tax, scholarly, legislative, or court      references (of which the textbook may be one).


• Review      the grading rubric to see how you will be graded for this assignment.

Your paper should be 6 pages in length and conform to the APA format. Include at least four scholarly references in addition to the course textbook. 

Chapters 18 & 19 in South-Western Federal Taxation 2019

Redemption Through Use of Related Corporations, 26 USC §304

Narotzki, D., & McCoskey, M. (2018). An attempt to distinguish between a section 351 transfer and a B reorganization. The ATA Journal of Legal Tax Research, 16(1), 17.

Alstadsæter, A., Jacob, M., & Michaely, R. (July 2017). Do dividend taxes affect corporate investment? Journal of Public Economics, 151(C), 74-83.

Assumption of liability, 26 U.S. Code § 357 (n.d.). Retrieved from Thomson Reuters Checkpoint database.

Basis to corporations, 26 U.S. Code § 362 (n.d.). Retrieved from Thomson Reuters Checkpoint database.

Basis to distributees, 26 U.S. Code § 358 (n.d.). Retrieved from Thomson Reuters Checkpoint database.

Complete liquidations of subsidiaries, 26 U.S. Code § 332 (n.d.). Retrieved from Thomson Reuters Checkpoint database.

Definitions relating to corporate reorganizations, 26 U.S. Code § 368 (n.d.). Retrieved from Thomson Reuters Checkpoint database.

Distributions of property, 26 U.S. Code § 301 (n.d.). Retrieved from Thomson Reuters Checkpoint database.