Lesson 3B-Objectives

After completing this lesson, students should be able to:

1.	Determine the following for incorporation transactions falling within and outside the scope of Section 351(a):

a.	shareholder’s amount realized and gain or loss realized
b.	amount of gain or loss recognized
c.	basis of stock received in the transaction
d.	whether the stock’s holding period tacks
e.	basis of the transferred property to the corporation
f.	whether the corporation’s holding period tacks
g.	corporation’s gain or loss on subsequent sale of the transferred asset.

2.	Recognize when boot has been received by the transferor in an incorporation transaction and determine the effect on the items listed in objective 1 where boot is received by the transferor.

3.	Discuss the possible consequences to the shareholder when he/she transfers liabilities to a corporation in a transaction qualifying under Section 351, and the effect of transferring liabilities on the items listed in objective 1.  

4.	Discuss issues that may arise in connection with the incorporation of an ongoing business, including for example, the assignment of income doctrine, the tax benefit doctrine, and reallocation of income and expenses under Section 482.