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

question 90

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 these.

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Definitions:

Perfection By Possession

A legal concept referring to the protection of a security interest in collateral by taking physical possession of it.

Advantages

Positive aspects or benefits associated with a particular situation, product, or service.

Security Interest

A legal claim or lien on collateral that has been pledged, usually to secure a loan.

Bankruptcy Laws

Statutes and regulations governing the process by which individuals or entities who are unable to repay debts to creditors may seek relief and reorganize or liquidate assets.