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To: GVTucker who wrote (174348)	5/2/2003 6:23:11 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 186894

Do you still contend that depreciation is not a "cash" expense, even though it is defined as a way to expense the cost of an item over its life. Do you have an answer that question? Also, do you think that Kalcan's posts fit within the definitions of polite society? Or is it fight fire with fire. And yes, the general rule is that a corporation recognizes no tax event with respect to dealing with its stock. I haven't really thought about it, but the problems and issues of stock grants seems more of a relief from indebtedness income issue. But that is a different issue. Let's promise to raise that if one of us is loosing or confused with the PRESENT ISSUE.

To: GVTucker who wrote (174348)	5/2/2003 7:14:05 PM
From: The Duke of URL©	Read Replies (1) \| Respond to of 186894

Sorry for the messiness, I ripped this out of some IRS opinion letter I found, but it is generally a fair statement of the applicable TAX law: LAW I.R.C. § 1032(a) provides that no gain or loss shall be recognized to a corporation on the receipt of money or ther property in exchange for stock (including treasury stock) of such corporation. I.R.C. § 311(a) provides, except as provided in subsection (b), no gain or loss shall be recognized to a corporation on the distribution of property (not in complete liquidation) with respect to its stock. I.R.C. § 311(b) provides, if a corporation distributes property (other than obligation of such corporation) to a shareholder in a distribution to which subpart A applies, and the fair market value of such property exceeds its adjusted basis (in the hands of the distributing corporation), then gain shall be recognized to the distributing corporation as if such property were sold to the distributee at its fair market value. I.R.C. § 317 provides that the term “property” means money, securities, and any other property.