Receipt of additional consideration
La. R.S. 47:134
in effect47:134. Receipt of additional consideration
A. Recognition of gain on exchanges. If R.S. 47:133 A, B, C, or H would apply to an exchange but for the fact that the property received in the exchange consists not only of property permitted by R.S. 47:133 A, B, C, or H to be received without the recognition of gain but also of other property or money, then the gain, if any, to the recipient shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property.
B. Additional consideration received in certain distributions. If R.S. 47:133 H would apply to a distribution but for the fact that the property received in the distribution consists not only of property permitted by R.S. 47:133 H to be received without the recognition of gain, but also of other property or money, then an amount equal to the sum of such money and the fair market value of such other property shall be treated as a distribution of property.
C. Loss. If R.S. 47:133 A, B, or C would apply to an exchange, or R.S. 47:133 H would apply to an exchange or distribution, but for the fact that the property received in the exchange or distribution consists not only of property permitted by R.S. 47:133 A, B, C, or H to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange or distribution shall be recognized.
D. Securities as other property. The following rules shall apply for purposes of this Section.
(1) In general. Except as provided in Subsection D(2) of this Section, the term "other property" includes securities.
(2) Exceptions.
(a) Securities with respect to which nonrecognition of gain would be permitted. The term "other property" does not include securities to the extent that, under R.S. 47:133 C or H, such securities would be permitted to be received without the recognition of gain.
(b) Greater principal amount in R.S. 47:133 C exchange. If:
(i) in an exchange described in R.S. 47:133 C, securities of a corporation a party to the reorganization are surrendered and securities of any corporation a party to the reorganization are received, and
(ii) the principal amount of such securities received exceeds the principal amount of such securities surrendered, then, with respect to such securities received, the term "other property" means only the fair market value of such excess. For purposes of Subsections D(2)(b) and D(2)(c) of this Section, if no securities are surrendered, the excess shall be the entire principal amount of the securities received.
(c) Greater principal amount in R.S. 47:133H transaction. If, in an exchange or distribution described in R.S. 47:133H, the principal amount of the securities in the controlled corporation which are received exceeds the principal amount of the securities in the distributing corporation which are surrendered, then, with respect to such securities received, the term "other property" means only the fair market value of such excess.
E. Assumption of liability.
(1) R.S. 47:133A or B exchanges. For purposes of R.S. 47:133A or B, where as part of the consideration to the taxpayer another party to the exchange has assumed a liability of the taxpayer or acquired from the taxpayer property subject to a liability, such assumption or acquisition (in the amount of the liability) shall be considered as money received by the taxpayer on the exchange.
(2) R.S. 47:133D or E exchanges. Except as provided in Subsections E(3) and E(4) of this Section, if:
(a) the taxpayer received property which would be permitted to be received under R.S. 47:133D or E without the recognition of gain if it were the sole consideration, and
(b) as part of the consideration, another party to the exchange assumes a liability of the taxpayer, or acquires from the taxpayer property subject to a liability, then such assumption or acquisition shall not be treated as money or other property, and shall not prevent the exchange from being within the provisions of R.S. 47:133D or E, as the case may be.
(3) Purpose.
(a) In general. If, taking into consideration the nature of the liability and the circumstances in the light of which the arrangement for the assumption or acquisition was made, it appears that the principal purpose of the taxpayer with respect to the assumption or acquisition described in Subsection E(1) of this Section,
(i) was a purpose to avoid Louisiana income tax on the exchange, or
(ii) if not such purpose, was not a bona fide business purpose, then such assumption or acquisition (in the total amount of the liability assumed or acquired pursuant to such exchange) shall, for purposes of R.S. 47:133D or E, be considered as money received by the taxpayer on the exchange.
(b) Burden of proof. In any suit or proceeding where the burden is on the taxpayer to prove such assumption or acquisition is not to be treated as money received by the taxpayer, such burden shall not be considered as sustained unless the taxpayer sustains such burden by the clear preponderance of the evidence.
(4) Liabilities in excess of basis.
(a) In general. In the case of an exchange,
(i) to which R.S. 47:133E applies, or
(ii) to which R.S. 47:133D applies by reason of a plan of reorganization within the meaning of R.S. 47:138 A(1)(d),
if the sum of the amount of the liabilities assumed, plus the amount of the liabilities to which the property is subject, exceeds the total of the adjusted basis of the property transferred pursuant to such exchange, then such excess shall be considered as a gain from the sale or exchange of a capital asset or of property which is not a capital asset, as the case may be.
(b) Exception. Subsection E(4)(a) of this Section shall not apply to any exchange to which Subsection E(3)(a) of this Section applies.
F. Exchanges not solely in kind.
(1) Gain of corporation in reorganization. If R.S. 47:133 D would apply to an exchange but for the fact that the property received in exchange consists not only of stock or securities permitted by R.S. 47:133 D to be received without the recognition of gain, but also of other property or money, then,
(a) if the corporation receiving such other property or money distributes it pursuant to the plan of reorganization, no gain to the corporation shall be recognized from the exchange, but
(b) if the corporation receiving such other property or money does not distribute it pursuant to the plan of reorganization, the gain, if any, to the corporation shall be recognized, but in an amount not in excess of the sum of such money and the fair market value of such other property so received, which is not so distributed.
(2) Loss. If R.S. 47:133 D would apply to an exchange but for the fact that the property received in exchange consists not only of property permitted by R.S. 47:133 D to be received without the recognition of gain or loss, but also of other property or money, then no loss from the exchange shall be recognized.
Amended by Acts 1958, No. 443, §3.
Source: Louisiana State Legislature (legis.la.gov)URL: https://legis.la.gov/legis/Law.aspx?d=101164Fetched: 10/20/2026