Arthur owns a tract of undeveloped land (adjusted basis of $145,000) that 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.

Question

Quizplus · Accepted Answer

Arthur does not recognize any gain or loss on the sale of property to a related party (his son) when sold at a loss. Ned's basis in the land is the amount he paid for it, which is $105,000.

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