Arthur owns a tract of undeveloped land (adjusted basis of $145,000) which he sells to his son, Ned, for its fair market value of $105,000. What is Arthur’s recognized gain or (loss) and Ned’s basis in the land?

Respuesta :

Answer:

Arthur’s recognized gain or (loss) = $0

Ned’s basis in the land = $105,000

Explanation:

As the adjusted basis for Arthur was $145,000 and he sold it for $105,000 hence, there is no gain. Ned basis is the fair market value at which he purchased the tract of land.

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