On April 2 of the Current Year, Jana Transfers Land

question 52

Essay

On April 2 of the current year, Jana transfers land with a basis of $140,000 and a fair market value of $120,000 to Amish Corporation in exchange for all of its stock. She had originally acquired the land on December 1, 2002. What tax issues arise from the exchange?

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Definitions:

Revenues

The total amount of money received or expected to be received by a company from its business activities, such as the sale of goods or services, before any expenses are deducted.

Expenses

Costs incurred in the process of earning revenue; general operational costs of a business.

Operating Revenue

Revenue earned from a company’s primary business activities, excluding items like investment revenue.

Car Dealership

A business that specializes in the sale of new or used cars.