Learn Your TCP Formulas

FMV of Stock Received

+Liability Relief

+FMV of Boot Received

-Basis in Property Contributed

Gain/Loss Realized for C-Corp, S-Corp, or Partnership

Cash Contributed

+ FMV of Services

+Adjusted Basis of Noncash Property

+Gain Recognized

-FMV Of Boot Received

-Liabilities Assumed by Corporation

SH Basis in Common Stock S-Corp and C-Corp

Cash Contributed

+Adjusted Basis of Property Contributed

+FMV Of Services

-Liability Relief

+Partner’s Share of Liabilities

SH Basis in Common Stock Partnership

Greater Of: SH Adjusted Basis in all property contributed+Gain recognized; or

Net Liabilities Assumed

Company Basis in Property Contributed for S-Corp or C-Corp

Carryover

Company Basis in Property Contributed for Partnership

True

True or False: Gain is recognized on all appreciated property in nonliquidating dividends for C-Corps

FMV

What is the distributee’s basis in property received in nonliquidating distribution

To the extent of Earnings and profits

How much of a nonliquidating distribution from a C-Corp is taxed as a dividend

True

True or false: Debt assumed reduces amount realized and doesn’t affect basis for C-Corps and S-Corps

true

True or False: Gains are recognized on appreciated property distributed in nonliquidating distributions for S-Corps

True

True or False: The gain from a nonliquidating distribution increases AAA for S-Corps

Nontaxable to the extent of basis

How does taxability work for nonliquidating distributions from S-Corps

FMV

Distributee basis in property from S-Corp nonliquidating distribution

False (This one has the same rule as C-Corps. Debt assumed reduces amount realized)

True or False: Debt assumed in nonliquidating distribution from S-Corp does not affect amount realized