3. ( T or F ) One of the requirements to treat a transaction as a nontaxable Section 1031 exchange is that the property must be held for investment, for productive use in a trade or business or as dealer property held for sale to customers in the ordinary course of a trade or business.

4.A non-U.S. corporation investor held a real estate asset (a parcel of land) that that was purchased for $100,000,000 for 10 years and will sell it for $130,000,000.The investor gain on the sale of the asset is considered to in a business that is effectively connected to a U.S. trade or business (ECI).

a.Compute the tax on the sale assuming that the investor held the asset directly (consider both ECI and branch profits tax)

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b.Compute the tax to the investor if held through US corporation (consider both entity level tax and FDAP tax on the distributions) with no treaty rates and a plan of liquidation in the year of sale

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