Ajax and Brindel Corporations have filed consolidated returns for several calendar years. Ajax acquires land for $60,000 on January 1 of last year. On September 1 of this year, Ajax sells the land to Brindel for $90,000. The basis and holding period for the land acquired by Brindel are:
D) none of the above

Question

Quizplus · Accepted Answer

Brindel's basis in the land is equal to the amount paid to acquire it from Ajax, which is $90,000. The holding period for the land includes both the time Ajax held it and the time Brindel held it. Therefore, Brindel's holding period starts on January 1 of last year, when Ajax acquired the land. The holding period ends on September 1 of this year, when Brindel sold the land.

Ajax and Brindel Corporations Have Filed Consolidated Returns for Several