Question

Q Which of the following transactions represents arms length transactions? Choose all that apply.
A.	An executor of an estate buys a house from the estate using a recent independent appraisal to set the purchase price.
B.	A city agency sells a property to a city run non-profit organization and provides 90% financing.
C.	A church sells an unused school to a developer in an online auction.
D.	A retired dentist user a broker to sell his practice and office to another dentist.

Answer 1

Answer:-

Option A: An executor of an estate buys a house from the estate using a recent independent appraisal to set the purchase price.

Option C: A church sells an unused school to a developer in an online auction.

Option D: A retired dentist user a broker to sell his practice and office to another dentist.

Explanation:- All of the above transaction represents arms length transactions. As in option(A), an independent appraisal is done to set the price. In option (C), an online auction is being done. In option(D), a broker was used in the transaction. All of these elements represents that they are arms length transactions.