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

Since Ajax and Brindel have filed consolidated returns, the land sale between them is considered a transaction between members of the same controlled group. Therefore, the transaction is not recognized for tax purposes, and Brindel's basis in the land will be the same as Ajax's basis ($60,000) and holding period will start on January 1 of last year. Hence, the correct choice is C.

Ajax and Brindel Corporations Have Filed Consolidated Returns for Several