Jay, that is a whole different matter, but long and short is that “transferring” the assets to a “business” is not necessarily a taxable transaction, and more often than not, is not taxable. For example, transfers to a partnership (including multi-member LLCs) in exchange for a partnership/membership interest is non-taxable under section 721 of the code (the basis is transferred over to the partnership interest); same result with a corporation under section 351 of the Code. Transfers to a single-member LLC is not taxable bc the LLC is disregarded. You can often make an election allowing taxability, and thus a fair market value basis, but that’s a different matter and rarely done. Bottom line, it all depends on how you transfer (sale vs contribution), what type of entity you are transferring to, and whether you make an election to otherwise alter the proscribed result/nature of the transaction. But transferring the cards to a business does not necessarily result in a taxable transaction/fair market value basis. Instead, it is normally a tax free transaction where the either the basis is transferred to the partnership interest/stock (carryover basis) or ignored alltogether and one still needs to determine the original basis.
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