[tnaguit]

I am transferring assets to a newly created entity, what value of the assets should be used? Is it the market or book value thereby recognizing gain or loss? Both entities are not for profit organizations. Please advise. Thanks

[morgaine300]

Not for profit is a specialized area that I'm not terribly familiar with, and I do know there's some different treatments with fixed assets. However, if we pretend for a moment that there's no special treatment, on the new entity you would use fair market value. The book value coming from the old entity would have no bearing on the new entity. It's sort of like them buying them used, which would be market value. For the old entity you would have to deal with the book value because that's what is already on their books.

Now there may be something special about a transfer with a not for profit, I don't know. (To tell you how specialized it is, I never even had non-profit stuff in my advanced class -- it was in the book but we never did it. Perhaps someone recently out of such a class might know more.)