A city contributes $500,000 to a corporation as an inducement to locate in the city. Within the next 12 months, the corporation uses the money to purchase property. The corporation has income of $500,000 and must reduce its tax basis in the property by the same amount
a. True
b. False
Indicate whether the statement is true or false
False
RATIONALE: The corporation does not have income, but it must reduce the basis of the property by $500,000 . Thus, the statement is not entirely true.
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