Six years ago, Demi purchased land as an investment. The land cost $180,000 and is now worth $470,000. Demi plans to transfer the land to Brown Corporation, which will subdivide it and sell individual tracts. Brown's income on the land sales will be ordinary in character. Read the requirements. Requirement a. What are the tax consequences of the asset transfer and land sales if Demi contributes the land to Brown in exchange for all its stock? on the transfer of land to Brown Corporation. Demi recognizes Brown's basis in the land will be to Brown. All gain on the subsequent sales will be This alternative results in the that accrued prior to Demi's transfer and the earned from subdividing the land Requirement b. In what alternative ways can the transaction be structured to achieve more favorable tax results? Assume Demi's marginal tax rate for capital gains is 23.8% (20% + 3.8% on net investment income), and Brown's tax rate is 21%. A. There are no alternatives that will allow Demi to avoid Sec. 351. B. Demi could find another investor who is willing to contribute property valued at $180,000 in exchange for 50% of the stock of the corporation.