In early 2020, James, Inc. announced its intention to construct a manufacturing facility in the Shenandoah Valley. To persuade James, Inc. to locate the facility in Burton County, the county government contributed a six-acre tract of undeveloped county land to the corporation. The appraised FMV of the land at the date of the contribution was $280,000. Soon after accepting the contribution, James, Inc. paid $3,300 to an attorney to do a title search to make sure that it had uncontested ownership of the land. James also paid $12,900 for a survey and site map of the six acres and $1,360 for two water wells drilled on the land. a.What is the proper tax treatment of James’ $17,560 expenditure with respect to the land? b.what type of taxation should be applied
In early 2020, James, Inc. announced its intention to construct a manufacturing facility in the
Shenandoah Valley. To persuade James, Inc. to locate the facility in Burton County, the county
government contributed a six-acre tract of undeveloped county land to the corporation. The appraised
FMV of the land at the date of the contribution was $280,000. Soon after accepting the contribution,
James, Inc. paid $3,300 to an attorney to do a title search to make sure that it had uncontested
ownership of the land. James also paid $12,900 for a survey and site map of the six acres and $1,360 for
two water wells drilled on the land.
a.What is the proper tax treatment of James’ $17,560 expenditure with respect to the land?
b.what type of
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