Discussion:Transfer of assets
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Transfer of assets
| 14 January 2006 | |
| A business(moving company) was liquidated and one partner got the large moving trucks. He started a new business and transfer title of the trucks to the new company. I stated the fmv of the trucks as his owners equity.
Can he depreciate the trucks and can it be considered 179 | |
| 15 January 2006 | |
| Well, there is a lot of missing information, but since you said "partner" I will assume that the moving company was a partnership (or LLC treatred as a partnership).
In that case, an appraisal should have been gotten on the trucks (which would have been relatively easy). That value would have been the distibution value to the partner and would have been used, in part, to calculate his gain or loss on the disposition of his partnership interest. When he started the new business and transferred title in the trucks to it, he made a §351 transfer (if to a corporation) or a §751 transfer (if to a partnership). The basis in the new company's hands is the "carry over" basis in the hands of the individual. In this case, the value mentioned above. The new company may depreciate it, but may not use §179. Per §179(d)(2)(C)(i), you can only use §179 if "the basis of the property in the hands of the person acquiring it is not determined in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired." | |
