Question

transaction corporation and north south corporation​

Answer 1

Explanation:

Basic fact pattern

• Corporation P owns all of the stock of corporation S

• In the “southbound” transfer, P contributes property to S

• In the “northbound northbound” transfer S distributes property to P transfer, S distributes property to

P

 There are innumerable variations

• Reasons for transfers

• Nature of property

• Relative values of property

• Form of documentation

• Timing and order of steps

• Status of S and P

 No matter the specific facts, the fundamental question remains the same

Are the two transfers separate, or is there an exchange?

 The tax consequences of separate v. exchange treatment vary based on the situation