- 8 - Discussion The sole issue for decision is whether petitioners must recognize a gain on the transfer of assets to Seggerman Farms under section 357 to the extent that the amount of liabilities that were assumed plus the amount of liabilities to which the property was subject exceeds the total of the adjusted basis of the property that was transferred to the corporation. Petitioners argue that, because they were not relieved personally from any debt that the corporation assumed or to which transferred property was subject or that was refinanced pursuant to restructuring of corporate debt, they should not have to recognize gain on the amount of the liabilities that exceeds the adjusted basis of the transferred assets. Section 357(c) provides, in part: SEC. 357(c). Liabilities in Excess of Basis.-- (1) In general.--In the case of an exchange-- (A) to which section 351 applies * * * * * * * * * * if the sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds the total of the adjusted basis of the property transferred pursuant to such exchange, then such excess shall be considered as a gain from the sale or exchange of a capital asset or of property which is not a capital asset, as the case may be. In Rosen v. Commissioner, 62 T.C. 11 (1974), affd. without published opinion 515 F.2d 507 (3d Cir. 1975), we addressed thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011