Built-in Gain

Built-in Gain

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Built-in Gain and Built-in Loss

1. any unrealized gain (loss) attributable to appreciation (depreciation) in the value of all assets held by a C corporation that elects to become an S corporation. See also built-in gain tax. Former IRC (check if this IRC provision is current here) §1374. 2. in a liquidation, a loss that was contributed to a corporation shortly before the adoption of the plan of liquidation. In general, the loss is disallowed upon liquidation if the distribution is to an unrelated party. Former IRC (check if this IRC provision is current here) §336(d).

3. a built-in deduction limitation prevents a consolidated group from acquiring a subsidiary with unrealized losses for the purpose of offsetting them against income of other members of the group. Former Tax Regulation (check if this Reg. is current here) §1.1502-15(a)(l).

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.


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