Question

Phillip and Evans form a business entity. Each contributes the following property.
Three months later, the entity sells the land for $652,000 because of unexpected zoning problems. The proceeds are to be applied toward the purchase of another parcel of land, to be used for real estate development. Determine the Federal income tax consequences to the entity and to the owners upon both the formation and the later sale of the land. Perform your analysis assuming that the entity is:
a. A partnership.
b. An S corporation.
c. A C corporation.
How could the parties structure the transaction so as to defer any recognized tax gain? Be specific.


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  • CreatedMay 25, 2015
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