Per Diem Rates from the U.S. General Services Administration
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Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").
Exchanging Property for Stock in Corporation
Basis in Stock You Receive in an Exchange for Property You Transfer
The basis of the stock you receive in exchange for property you transfer to the corporation is the adjusted basis of the property you transferred, increased by:
- Any gain recognized by you, and
- Any amount received by you that is treated as a dividend.
Decreased by:
- Money received by you
- The fair market value of other property received from the corporation
- Any of your liabilities that the corporation assumes unless it's the type of the liability that would give rise to a deduction by the corporation (e.g., accounts payable do not reduce your stock basis)
- Any loss you recognized on the exchange
- You may not recognize a loss if you own more than 50% of the stock.
Corporation's Basis in Property it Receives in an Exchange for its Stock
The corporation's basis property it receives in an exchange for its stock is is the same as the adjusted basis you had in the property at the time of the transfer-Increased by:
- Any gain you recognize in the exchange.
Liabilities Assumed by the Corporation
For basis purposes, liabilities assumed by the corporation from you are treated as if you received money. Therefore, they reduce your stock basis. However, liabilities that are assumed do not reduce your stock basis if they are of the type that would give rise to a deduction by the corporation (e.g., trade accounts payable or interest).
For gain recognition purposes, liabilities assumed by the corporation from you are not treated as if you received money or other property (they are ignored). However, if the liability exceeds> the adjusted basis in the property transferred, then gain is recognized, but only for the excess amount.
Services for Stock
The basis in stock receive in an exchange for services is the fair market value of the services you provide, plus any money and the fair market value of other property you transfer to the corporation. The value of the services are taxed to you as ordinary income. The corporation gets a deduction for the value of the services.
To be part of the Section 351 transferor group, assuming other people are involved with you in the exchange, you must contribute at least 10% of the value of the services in the form of money or other property to the corporation.