In order to encourage the development of its industrial park,Union County gives Darter Corporation land (fair market value of $800,000)and cash of $500,000. Within one year,Darter constructs a new plant at the site at a cost of $1,200,000.
a.How much income, if any, must Darter Corporation recognize as a result of these transfers?
b.What basis will Darter Corporation have in the land? In the plant?

Question

Quizplus · Accepted Answer

The Answer of In order to encourage the development of its industrial park,Union County gives Darter Corporation land (fair market value of $800,000)and cash of $500,000. Within one year,Darter constructs a new plant at the site at a cost of $1,200,000.
a.How much income, if any, must Darter Corporation recognize as a result of these transfers?
b.What basis will Darter Corporation have in the land? In the plant?

In Order to Encourage the Development of Its Industrial Park,Union