In order to encourage the redevelopment of its urban center,the city of Birmingham contributes undeveloped land (fair market value of $900,000)and cash of $350,000 to Blue Corporation. Within the year,Blue constructs a new office building at the site at a cost of $850,000.
a.How much income, if any, must Blue Corporation recognize as a result of these transfers?
b.What basis will Blue Corporation have in the land? In the office building?

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The Answer of In order to encourage the redevelopment of its urban center,the city of Birmingham contributes undeveloped land (fair market value of $900,000)and cash of $350,000 to Blue Corporation. Within the year,Blue constructs a new office building at the site at a cost of $850,000.
a.How much income, if any, must Blue Corporation recognize as a result of these transfers?
b.What basis will Blue Corporation have in the land? In the office building?

In Order to Encourage the Redevelopment of Its Urban Center,the