Scribd Logo
Upload

Welcome to Scribd!

  • Research Sale of Raw Land (1) .Docx63f3d1f84f41c28386

    Uploaded by

    derrick owino
    5 views1 page
    Sanchez purchased raw land for $1.5 million to develop and sell homes. Before completing development, Sanchez contributed the land, then worth $2.5 million, to RGV Investors LLC in exchange for a 10% capital and profits interest. RGV's strategy is to hold land for investment and later sell at a gain. The summary addresses two questions: a) if RGV sells the land for $3 million four years later, how much gain is recognized and its character, and b) if sold for $3 million five and a half years later, the gain recognized and its character.

    Original Description:

    Original Title

    Research Sale of Raw Land (1).docx63f3d1f84f41c28386

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Sanchez purchased raw land for $1.5 million to develop and sell homes. Before completing development, Sanchez contributed the land, then worth $2.5 million, to RGV Investors LLC in exchange for a 10% capital and profits interest. RGV's strategy is to hold land for investment and later sell at a gain. The summary addresses two questions: a) if RGV sells the land for $3 million four years later, how much gain is recognized and its character, and b) if sold for $3 million five and a half years later, the gain recognized and its character.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    5 views1 page

    Research Sale of Raw Land (1) .Docx63f3d1f84f41c28386

    Uploaded by

    derrick owino
    Sanchez purchased raw land for $1.5 million to develop and sell homes. Before completing development, Sanchez contributed the land, then worth $2.5 million, to RGV Investors LLC in exchange for a 10% capital and profits interest. RGV's strategy is to hold land for investment and later sell at a gain. The summary addresses two questions: a) if RGV sells the land for $3 million four years later, how much gain is recognized and its character, and b) if sold for $3 million five and a half years later, the gain recognized and its character.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Research Assignment

    Sanchez purchased raw land three years ago for $1,500,000 to develop into lots and sell
    to individuals planning to build their dream homes. Sanchez intended to treat this
    property as inventory, like his other development properties. Before completing the
    development of the property, however, he decided to contribute it to RGV Investors LLC
    when it was worth $2,500,000, in exchange for a 10 percent capital and profits interest.
    RGV’s strategy is to hold land for investment purposes only and then sell it later at a
    gain.
    a. If RGV sells the property for $3,000,000 four years after Sanchez’s contribution,
    how much gain or loss is recognized and what is its character? {Hint: See § 724.}
    b. If RGV sells the property for $3,000,000 five and one-half years after Sanchez’s
    contribution, how much gain or loss is recognized and what is its character?

    Note: Use proper internal tax research written communication format (see below). I recommend
    you keep it to no more than one page, 12 font size, word document. If you have taken the tax
    research course and format is slightly different, I will accept that format. Otherwise, you can use
    the following research format:

    Facts (restatement of scenario):

    Issue (tax question(s)):

    Findings/discussion as it relates to question “a” (including citation references and final answer as
    it relates to this question should be clear and located in the last paragraph/sentence:

    Findings/discussion as it relates to question “b” (including citation references and final answer as
    it relates to this question should be clear and located in the last paragraph/sentence:

    You might also like