You have a client who is starting a new corporation where they will be manufacturing medical and surgical tools. Your client would like to purchase equipment for this venture from another corporation, as this equipment can be very expensive for a new venture. However, the corporation who owns the equipment still owes $100,000 to the equipment manufacturer, which would need to be paid as part of this purchase. How would you advise your client in this case?

In your discussion post, consider the

• possible tax ramifications to the party transferring the property to your client's corporation,
• the tax ramifications to your client's corporation, and
• whether the possibility that there may be a better way to handle a situation like this where the property being transferred has associated liabilities.