Payments that result in a recognized loss
for the payor should not be encompassed by the definition of a BEAT payment.
Thus, there is a recognized loss
of $2,000 (on the stock) and a realized gain of $ 1,000 on the entire transaction [($13,000 - $10,000) - $2,000).
No court has yet recognized loss
of language and culture as compensable.
When the entity has recognized loss
, and impairment loss, the auditor should gather evidence supporting the amount of the impairment adjustment recorded and determine whether the entity has appropriately followed generally accepted accounting principles.
For example, a later sale at $50,000 would allow Son to claim a $10,000 realized and recognized loss
, whereas there would be a $20,000 realized gain that would not be recognized--due to section 267(d)--if the transaction were governed by IRC section 267.
In 1982, the Abrams experienced a fire in their house, causing $15,000 damage and a recognized loss
Thus, all gains recognized by an S corporation during the recognition period are presumed to be RBIGs, except to the extent the taxpayer establishes that a portion of the gain constitutes post-conversion appreciation or that the asset was not held at the beginning of the recognition period.9 Conversely, no loss recognized by an S corporation during the recognition period is treated as a recognized built-in loss (RBIL), except to the extent the taxpayer establishes that the asset was held at the beginning of the recognition period and further establishes the portion of the recognized loss
that was built in at the beginning of the recognition period.10
This part also presents the amount of the recognized loss
, if any, and the amount of the recovery of any previously recognized loss
Exhibit 1: M's gain on sale of residence (1) Original cost $50,000 (2) Conversion value 60,000 (3) Depreciation taken 9,000 (4) Adjusted basis for determining gain: (1)--(3) 41,000 (5) Adjusted basis for determining loss: lesser of (1) or (2)--(3) 41,000 (6) Sales price 65,000 (7) Recognized gain(6)-(4) $24,000 Exhibit 2: M's loss on sale of residence (1) Original cost $50,000 (2) Conversion value 45,000 (3) Depreciation taken 8,000 (4) Adjusted basis for determining gain: (1)--(3) 42,000 (5) Adjusted basis for determining loss: lesser of (1) or (2) -13) 37,000 (6) Sales price 40,000 (7) Recognized gain: (6)--(4), but not less than zero -0- (8) Recognized loss
: (6)--(5), but not more than zero -0-
In this case, the partnership will reduce the tax basis of the remaining assets in the partnership by the amount of the redeeming partner's recognized loss
, or by the step-up in basis that the redeeming partner receives in the distributed property.
A distribution may result in a recognized loss
to a partner only where the partner's interest in the partnership is being completely liquidated and he or she receives only cash, unrealized receivables as defined in IRC Sec.