Question

Lisa sells business property with an adjusted basis of $247,000 to her son, Alfred, for its fair market value of $197,600.

Answer 1

Lisa would have a capital loss on the sale.

Step-by-step explanation:

If Lisa sells a business property to her son Alfred for its fair market value, it is considered a transfer of property between related parties. In this case, Lisa sells the property with an adjusted basis of $247,000 to Alfred for its fair market value of $197,600. Since the fair market value is lower than the adjusted basis, Lisa would have a capital loss on the sale.