In 1987, Roy leased real estate to Drab Corporation for 20
years. Drab Corporation made significant capital improvements to
the property. In 2006, Drab decides not to renew the lease and
vacates the property. At that time, the value of the improvements
is $800,000. Roy sells the real estate in 2018 for $1,200,000 of
which $900,000 is attributable to the improvements. When is Roy
taxed on the improvements made by Drab Corporation?
Lee, a citizen of Korea, is a resident...