Thanks Mark; this is very helpful. Just a couple quick questions before I accept your answer so that you can be paid for your time.
A) To clarify, please. Shareholder transfers Truck A & Truck B and $3,000 cash to new corporation from old corporation.
Truck A Cost: $30,000
A/ Depreciation at time of transfer: $12,000.
Adjusted Basis of Truck A: $18,000
Truck A Loan Payable Balance at time of transfer: $25,000
Truck B (No liability)Cost $25,000-$20, 000 Accumulated Depreciation. Adjusted Basis of truck B $ 5,000.
Am recognizing a $7,000 gain (25,000-18,000) related to the transfer of truck A and not looking at anything else transferred at the same time?
is there no gain on the entire transfer in its' entirety? (18,000(Truck A Basis) +$ 5,000(Truck B Basis) + $3,000(Cash) -$25,000 (Loan Payable)=$1,000 shareholder basis in the corporation.
B) If there is a gain, is it a Capital Gain
on Schedule D
Boy do I hate when little corporations choose to do things the hard way! I found the Section 351 requirements. You don't by any chance have a template that you use that you could send me related to this requirement? I've never done one of these and want to do this correctly.
Sorry for the delay in responding. I'm getting ready for a big labor day party and trying to put this to rest at the same time.
Thank you very much for your time. I appreciate your help.