T2 entries for land sold to non arms length at FMV

Land sold to non arms length corporation for $1.00. Purchase cost of land was $2000 Since this is a non arms length transaction the FMV ($5200) has to be used as disposition value. Schedule 100 do I decrease the value of land by $2000 (purchase price) or the FMV ($5200). Would I be entering a gain or a loss on line 9609 Schedule 125? Is this correct - Schedule 6 - Part 2 (column 3) Proceeds of Disposition $5200, (column 4) ACB ($2000 initial cost + improvements = $5895), (column 5) Outlays $243. (Column 6) loss of $938. What other entries on T2 would this involve?


Your S100 should show the  Asset Class being $0 as the class is empty and then you should have a Capital Loss Carry-forward that reflects the loss.

Line 9609 is for Farm Revenue and you hadn't clarified that this is for a farm. 

If there was a profit, it would go on line 113 of S1 and if it's a loss it goes on line 210 of S4.

I hope this helps.


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dave , CFP, EPC, RRC

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