A corporation's tax basis in property received in exchange for corporate stock depends on whether the exchange was taxable or nontaxable to the transferors of the property.

Question

Quizplus · Accepted Answer

The corporation's tax basis in property received in exchange for corporate stock is determined by the transferors' tax basis if the exchange was nontaxable, while if the exchange was taxable, the corporation's tax basis is determined by the FMV of the property at the time of the exchange.

A Corporation's Tax Basis in Property Received in Exchange for Corporate