Sale of Partnership's assets - received cash and stock. How to treat?

[Hamacher]

I have a client that sold the assets of his partnership. The people acquiring the assets set up a new Corporation and gave my client $300,000 cash and 5.5% of the new company's stock. My client had $100,000 basis in the assets that were sold. How do you treat the receipt of the stock? We want to close the old company down and distribute the stock to the partners but want to make sure we are handling everything properly.

[Burke]

The sale price would include the cash and FMV of the stock (assuming it is not restricted.) That FMV becomes his stock basis.

[Hamacher]

Value of Corp. interest

I currently have the client reviewing the purchase agreement. I suspect there are some restrictions on the sale of the shares. The Corp. is a closely held company which makes it difficult to assign a value to the shares.

Would it make any difference on how the purchaser treated the transfer of stock? Wouldn't they have to assign a value to the shares in the agreement?

Thanks again for your help!