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.

---

Definitions:

Sherman Anti-Trust Act

A landmark federal statute in the United States passed in 1890 that prohibits monopolistic business practices and promotes competition in the marketplace.

Restraint of Trade

Legal terminology referring to practices or agreements that restrict competition, often regulated to protect economic fairness.

Holding Companies

Corporations that own a controlling stake in one or more other companies, managing them but not typically engaged in their daily operations.

Pending Investments

Investments or financial commitments that have been announced or planned but have not yet been executed or fully realized.