Valueplus is a united states company

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ValuePlus is a United States Company.
HFTL is an Italian Company and is owned 100 percent by ValuePlus as a subsidiary.
ValuePlus gives assets to HFTL, HFTL gives all their stock to ValuePlus. The assets given to HFTL will be used in the company's active trade or business. The first asset to be transferred over is Inventory that has a value of 70,000 and cost 40,000. The second asset to be transferred was Equipment that was bought for 240,000, adjusted basis of 180,000 and fair market value of 250,000. The third is non depreciable equipment bought for 100,000 and fair market value of 155,000. The final being an A/R account basis of 10,000 and fair market value of 55,000.

What are the tax consequences for ValuePus when it transfers the assets described above to HFTL exchange for HFTL stock?

Please Consider Transfer Pricing rules and exceptions. Pay close attention to exceptions to Section 367: Active Trade/Business and also Depreciation Recapture Rule.

Reference no: EM13277084

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