The transferor's basis for any noncash boot property received in a Sec. 351 transaction is the boot's FMV reduced by any unrecognized gain.

Question

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In a Sec. 351 transaction, the transferor's basis for any noncash boot property received is the boot's fair market value (FMV), but it is not reduced by any unrecognized gain. The basis adjustment typically involves other factors, such as the basis of the property transferred and any gain recognized by the transferor.

The Transferor's Basis for Any Noncash Boot Property Received in a Sec