This is a two part question:
Client has 5th wheel camper owned by sole prop. purchased 8/1/04 and took Sec. 179 deduction for full costs ($21,000). Forms S-Corp on 1/1/06, but does not transfer camper into corp. Client purchases piece of land to build a house on (S-Corp is a home builder). Contract is to give camper plus $17,000 to land owner for lot (FMV of camper is $19,000).
Question 1: What is his basis in the lot? I'm thinking it is the lot price - camper fmv?
Question 2: Is the transfer of the camper, which has an adjusted basis of $0 for a share of the property valued at $19,000, a taxable transaction?
Thanks in advance!
Client has 5th wheel camper owned by sole prop. purchased 8/1/04 and took Sec. 179 deduction for full costs ($21,000). Forms S-Corp on 1/1/06, but does not transfer camper into corp. Client purchases piece of land to build a house on (S-Corp is a home builder). Contract is to give camper plus $17,000 to land owner for lot (FMV of camper is $19,000).
Question 1: What is his basis in the lot? I'm thinking it is the lot price - camper fmv?
Question 2: Is the transfer of the camper, which has an adjusted basis of $0 for a share of the property valued at $19,000, a taxable transaction?
Thanks in advance!
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