Ajax and Brindel Corporations have filed consolidated returns for several calendar years.Ajax acquires land for $60,000 on January 1 of last year.On September 1 of this year,Ajax sells the land to Brindel for $90,000.The basis and holding period for the land acquired by Brindel are:
D)none of the above

Question

Quizplus · Accepted Answer

The basis of the land for Brindel will be the same as what Ajax had, which is $60,000. However, the holding period for Brindel will begin on September 1 of this year when they acquired the land from Ajax. Therefore, the holding period for Brindel is less than a year. Option A is incorrect because it assumes that the holding period for Brindel begins on January 1 of last year when Ajax acquired the land, which is not the case. Option B is incorrect because it assumes that Brindel sold the land back to Ajax, which is not mentioned in the scenario. Option D is incorrect because there is a correct answer.

Ajax and Brindel Corporations Have Filed Consolidated Returns for Several