11. Taxpayer owns a parcel of undeveloped real estate that has a basis to taxpayer of...

11. Taxpayer owns a parcel of undeveloped real estate that has a basis to taxpayer of $200,000. Taxpayer purchased the real estate in 2003 for investment. Taxpayer sold the property to his nephew on January 10, 2017 for $80,000. Is the loss deductible by the taxpayer, and what Code sections are applicable to the transaction? Assume taxpayer has no other capital gains or losses for the year.

a. No amount of the loss is not deductible because the sale is to a related party; Code Section 1001(a) and Code Section 267(a) and (d).

b. The loss is deductible; Code Section 469(c)(7).

c. $3,000 of the loss is deductible in the current year; Code Sections 1001(a) and 1211(b).

d. None of the above answers is correct.

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ekkarill92 answered 1 year ago

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