Arthur Owns a Tract of Undeveloped Land (Adjusted Basis of $145,000)

question 85

Multiple Choice

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?

• A) $0 and $105,000.
• B) $0 and $145,000.
• C) ($40,000) and $105,000.
• D) ($40,000) and $145,000.
• E) None of the above.

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Definitions:

Emotional Impacts

refers to the effects or consequences of events, actions, or conditions on an individual's emotions or psychological state.

Anger

An emotional state characterized by feelings of displeasure or hostility, often resulting from perceived wrongs or frustrations.

Anxiety

Sensations of apprehension, stress, or jitteriness, usually connected to an upcoming occasion or an unpredictable result.

Post-traumatic Stress Disorder

A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by severe anxiety, flashbacks, and uncontrollable thoughts.