Further, aside from the foregoing technological, political, and economic changes, the relaxation of the estate, gift, and generation-skipping taxes (collectively, transfer taxes) that began in 1976 and continues today (25) makes the institution of a carryover tax basis
Essentially, the seller in a life settlement transaction would have the same tax basis
as someone who surrendered a policy.
While a purchaser is generally incentivized to engage in an asset acquisition in order to avoid acquiring unwanted liabilities of a target, as well as to obtain a tax basis
step-up, (4) a seller is typically incentivized to engage in a stock sale.
The death of a partner in a general, an LP or LLC can have additional tax basis
complications that are often overlooked by tax practitioners.
Similarly, if the shareholder's tax basis
in the shares redeemed is minimal or zero, the sale or exchange treatment of the transaction may not have a material effect on taxable income.
Father's tax basis
is $90,000, and the properly has a FMV of $30,000.
To promote home ownership and in recognition of the difficulties of ascertaining a home's tax basis
, Congress has traditionally offered homeowners numerous tax benefits.
Assume the only contributions to the trust are separate assets of James worth $500,000, with an income tax basis
For property acquired by gift, grantees use the same tax basis
as the grantor's tax basis
732 and allocate the tax basis
of the distributed resulting partnership interest strictly in accordance with the pro rata percentage the partner is receiving (the pro rata method).
For lifetime gifts, under IRC section 1015, a carryover tax basis