Question:Arte, an individual, wants to transfer raw land worth
$100,000 with a $50,000 basis to Angel...
Question
Arte, an individual, wants to transfer raw land worth
$100,000 with a $50,000 basis to Angel...
Arte, an individual, wants to transfer raw land worth
$100,000 with a $50,000 basis to Angel Corporation for $100,000 in
value. How much income will Arte realize and recognize if he
receives $100,000 cash from Angel Corporation, and what will be
Angel Corporation’s basis in the land? Does Arte’s income
recognition change if Angel Corporation transfers its own stock to
Arte in the exchange (assume the “general rule” applies)? Will the
answer change in the stock case if Arte is the sole shareholder of
Angel Corporation? Conceptually, why should it
change?