If the Threat of Condemnation Exists and the Taxpayer Has

question 70

True/False

If the threat of condemnation exists and the taxpayer has reasonable grounds to believe that the property will be condemned,the taxpayer may elect to defer gain even if the taxpayer sells the property to a party other than the governmental unit that is threatening to condemn the property.

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Definitions:

Share Capital

The amount of money a company has raised by issuing shares to shareholders.

Bargain Purchase

A transaction in which a buyer acquires assets, or occasionally a business, for a price considered to be significantly lower than the fair market value.

Intragroup Services

Services rendered by one entity within a larger corporate group to another entity within the same group.

Profit

The financial gain achieved when the amount of revenue gained from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.