A City Contributes $500,000 to a Corporation as an Inducement

question 91

True/False

A city contributes $500,000 to a corporation as an inducement to locate in the city.Within the next 12 months,the corporation uses the money to purchase property.The corporation has income of $500,000 and must reduce its tax basis in the property by the same amount.

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Definitions:

Annual Return

This measures the financial gain or loss of an investment over a one-year period, expressed as a percentage of the investment's initial cost.

Investment

Items acquired with the hope that they will produce earnings or increase in value over time.

Annual Return

The percentage change in an investment's value over a one-year period, including dividends, interest, and capital gains.

Education Fund

A savings or investment account set aside for educational expenses, often with tax advantages, to support an individual's future education costs.