Four years ago, Company PJ acquired 1,000 acres of undeveloped land. On the date of the exchange, the land’s FMV was $700,000. During the past four years, the land appreciated in value by $600,000; a recent appraisal indicated that it is worth $1.3 mil-lion today. However, if Company PJ sells the land for $1.3 million, the taxable gain will be $825,000. Can you explain this result?