ACCT 580- Advanced Taxation

Research Exercise #3: Formations

Instructions:

To complete this assignment, you need to use the CCH Tax Research Network, available on  the CWU Library network:

  1. You must be logged into the CWU network (click here for help).

  2. You should click on this link to the CCH tax service with your right mouse button and have the CCH service open in a new window. Then you can use the service to find the answers and the form below to submit your answers.

  3. To use the CCH Tax Research Network to answer these questions:

    -Click on the Enter button on the first web page  
    -Click on the Federal tab on the main page of the CCH Tax Research Network  
    -Select the appropriate CCH features/resources for the exercise.  

Purpose:

The purpose of this exercise is to introduce you to the use of CCH for the purpose of finding and interpreting:

  1. The sections of the Internal Revenue Code (IRC) related to the exchange of property for ownership interests in corporations and partnerships; and

  2. The sections of the Internal Revenue Regulations (IRR) related to those sections.

 

Last Name:  

 First Name:  

 

CCH Search Section Question Enter your answer:
Standard Federal Income Tax Reporter
1. Briefly describe the necessary conditions per §351 for nonrecognition of gain or loss of a transaction that falls within its purview. 
2. According to §1.351-3, what and when must the recipients of stock in a §351 exchange do?
3. According to §358, what is a recipient's basis in the stock received in a §351 exchange?
4. Identify the code section that describes how to determine the corporation's basis in the property received in a §351 exchange and briefly explain what it requires.
5. What would the recipient's basis in the stock be if the exchange did not qualify as a §351 exchange?
     
Standard Federal Income Tax Reporter
6. Briefly describe the necessary conditions per §721 for nonrecognition of gain or loss of a transaction that falls within its purview. 
7. How would a partner's exchange of services for an ownership interest affect the application of §721?
8. Which taxpayer, if any, ever recognizes gain or loss on unrealized receivables that were transferred under §721?
9. Referring to question 8, when does recognition occur  and how is the gain or loss classified?
10. Assume that a partner sells his/her interest in a partnership before it collects the unrealized receivables that he/she contributed to it under §721.

How would he/she classify the gain/loss attributable to the unrealized receivables according to §751 and §1.751-1?

    
When you select Submit, your answers will be submitted to a database for grading by me.
The confirmation page that opens will be the only confirmation that you receive.

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Ronald R. Tidd, Ph.D., CPA
509.963.2466
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