Chapter 4, Problem 2DQ

Which one of the following correctly states a basic feature of the IRC Chapter 14 special valuation rules? A) In a transfer of property in trust to which they apply, they make any income interest retained by the transferor that is a unitrust right subject to gift tax.     B) They apply to any intrafamily transfer of assets for which there is no established market if the interest retained by the transferor is of the same type as the interest transferred.     C) They apply to a transaction between family members to acquire, use, or sell at fair market value property for which there is no established market.     D) In a transfer of a closely held business interest to which they apply, they make any distribution right retained by the transferor that is not fixed in time and amount subject to gift tax.

Which two models may an entity opt for when accounting forinvestment property?

Compare and contrast the basis of property acquired via purchase, conversion from personal use to business or rental use, tax-deferred exchange, gift, and inhertiance.