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In order to encourage the development of its industrial park, Union County gives Darter Corporation land (fair market value of $800,000) and cash of $500,000. Within one year, Darter constructs a new plant at the site at a cost of $1,200,000.

a. How much income, if any, must Darter Corporation recognize as a result of these transfers?

b. What basis will Darter Corporation have in the land? In the plant?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M970660

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