Breslin Inc. made a capital contribution of investment property to its 100 perce

Question

Breslin Inc. made a capital contribution of investment property to its 100 percent owned subsidiary, Crisler Company. The investment property had a fair market value of $3,480,000 and a tax basis to Breslin of $3,020,000.

What are the tax consequences to Breslin Inc. on the contribution of the investment property to Crisler Company?

What is the tax basis of the investment property to Crisler Company after the contribution to capital?

a.

What are the tax consequences to Breslin Inc. on the contribution of the investment property to Crisler Company?

Does not recognize gain or loss on the transfer Recognizes gain or loss on the transfer

Explanation / Answer

a. any transfer of a capital asset by a company to its subsidiary company, if—

Hence the above transaction is not regarded as transfer. Hence Breslin Ltd does not recognise capital gain on transfer to its wholly owned subsidary company $3,020,000

b.Since the above transaction is not regarded as transfer,tax basis of the investment property to Crisler Company after the contribution to capital is

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