Nancy Purchased a Building and Then Leased the Building to ZML.Nancy

question 62

Essay

Nancy purchased a building and then leased the building to ZML.Nancy is the sole shareholder of ZML.She leased the building to ZML for $2,500 per month.However,the IRS determined that the fair market value of the lease payment should only be $1,500 per month.How would the lease payment be treated with respect to both Nancy and ZML?

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Definitions:

Privatization

The process of transferring ownership of a business, enterprise, agency, or public service from the government to private individuals or organizations.

Health Care

Services provided by medical professionals to maintain or improve individuals' health, including prevention, diagnosis, treatment, and recovery.

Government

Those state institutions that represent the population and make rules that govern the society.

Science

A systematic enterprise that builds and organizes knowledge in the form of testable explanations and predictions about the universe.