Twelve years ago, Mr$.$ Davis contributed a property that includes a building and land to Davis Office Furniture, a C corporation.

$$ The property will be used for office and warehouse space.

$$ Mr$.$ Davis acquired the property and used it as rental property for five years prior to the contribution to the corporation.

$$ The property was exchanged for a $30$ percent equity interest in the corporation.

$$ After the contribution of the property, Mr$.$ Davis had an $80\%$ interest in the corporation.

$$ The adjusted tax basis in the warehouse property at the time of the contribution to the corporation was $$1,500,000($building $$900,000$ and $$600,000$ land$).$ This basis reflects depreciation taken up to the date of the contribution.

$$ The building$$s appraised FMV on date of contribution to the business was $$1,650,000.$

$$

During the current year, Mr$.$ Davis decided to retire and close the business.

$$ On the last day of the year the corporation sold the property $($building and land$)$ to an unrelated purchaser for $$2,500,000.$

$$ A realtor was paid a $6$ percent commission.

$$ The corporation will liquidate its office furniture inventory shortly and the company may need your assistance with that at a later date.

$$

Research Issue$($s$)$:

State the specific issues that the memo addresses. This section confirms that you understand the research question$($s$),$ reminds the reader of the question$($s$)$ being analyzed, and allows future researchers the ability to determine if the analysis in the memo is relevant.

Issues $($can be one or more$)$ should be written as specifically as possible and limited to one or two sentences per issue.

If you have multiple issues outline them together under this paragraph and proceed through the memo.