Ed operates a storage business as a sole proprietorship and owns the following assets acquired in 2004:

The FMV of the warehouse and the land are \($500,000\) and \($200,000,\) respectively. Ed owns 75% of the stock of the Crane Corporation. If he sells the two assets to Crane at a price equal to the FMV of the assets, determine the recognized gain and its character due to the sale of the:

a. Building

b. Land

Transcribed Image Text:

Warehouse $400,000 Minus: Accumulated depreciation (230,000)