Can Form 1120 Schedule M 3 Transaction 2019-2024

So, that's important to realize. As far as the calculation, it says the basis in the new asset will be the basis of the old, which was 200, plus the liability assumed, plus the gain recognized, minus the liability of the old, minus the boot received. Equals 200. So, that is going to be the calculation of what we're gonna have. Notice here, it's 200 plus 180 minus 180 equals 200. So, that's gonna be the basis moving forward. So, if they ever ask you, "Hey, what's the basis?" and we'll do a problem on that a little bit later. Alright. The next item we're looking… Oh, here's the journal entry, by the way. Let's do that journal entry. Mm-hmm. Let's see. What's the journal entry? Journal entry is the new liability is 80, get rid of the old liability, which was 150. We received some cash of 30. We got to get rid of the old for 200. Was the book value carrying value. We just recognized a gain of a hundred, so we got a gain. We got the 200, the 80. That's three 80. Here we've got 180. The difference is the new of 200. So, if you do it this way, it's much easier to figure out the basis of the new. This is the plug. Got rid of the set up a new liability, got rid of the old, got rid of the property, you recorded the gain that we just recognized, realize the lower of the two, how much cash, any other assets you've got, if they gave you another asset, put it here. The difference, the plug, is this. Alright, it says here in order to do this, all the following conditions: the proceeds from the sale have to go to an escrow...