Assessment Activity 3 Review Fraud Control Activities Fraud control requires the implementation of a number of control strategies which contribute to an effective fraud control framework, two of which are….
Owen and Lisa Cordoncillo
Group 3: Writing Assignment
- Your supervisor has asked you to research the following situation concerning Owen and Lisa Cordoncillo. Owen and Lisa are brother and sister. In May 2019, Owen and Lisa exchange land they both held separately for investment. Lisa gives up a 2 acre property in Texas with an adjusted basis of $2,000 and a fair market value of $6,000. In return for this property, Lisa receives from Owen a 1 acre property in Arkansas with a fair market value of $5,500 and cash of $500. Owen’s adjusted basis in the land he exchanges is $2,500. In March 2020, Owen sells the Texas land to a third party for $5,800.
Required: Go to the IRS website (www.irs.gov). Locate and review Publication 544, Chapter 1, Nontaxable Exchanges. Write a file memorandum stating the amount of Owen and Lisa’s gain recognition for 2019. Also determine the effect, if any, of the subsequent sale in 2020.