State the deemed proceeds of disposition

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Question - Martin Forest has owned a tract of land for over 10 years. He acquired the land at a cost of $360,000. An appraiser has advised him that the land has a current fair market value of $500,000.  It is Martin's intention to sell the land.

The following four Cases make different assumptions as to the identity of the purchaser and the proceeds of disposition.

Case 1 Martin sells the land to an arm's length party for $500,000.

Case 2 Martin sells the land to his sister for its cost of $360,000.

Case 3 Martin gifts the land to his 10-year-old son.

Case 4 Martin sells the land to his mother for $600,000.

Required - For each of the alternatives under consideration, state the deemed proceeds of disposition and state the adjusted cost base for the purchaser.

Reference no: EM133139512

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