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Lisa is the sole proprietor of a business that manufactures solar panels. This week Lisa was approached to exchange her business assets for shares in

Lisa is the sole proprietor of a business that manufactures solar panels. This week Lisa was approached to exchange her business assets for shares in Burns Power. As part of the exchange, Lisa is requiring Burns Power to assume the home equity loan on her home. Do you think Lisa should argue that there is no tax-avoidance motive in this arrangement? Suppose that Lisa established her business five years ago by investing funds from a home equity loan. Does this make any difference?

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