(Taxation Business pass thru entities)

Can you please explain this problem in detail including detail on the 724 code.

Need to do a Tax research Memoranda on this and dont know how to start.

Howard purchased raw (undeveloped) land three years ago for $1,500,000 to develop into lots and sell to individuals planning to build their dream homes. Howard intended to treat this property as inventory, like his other development properties. Before completing the development of the property, however, he decided to contribute it to Counterpart Investors LLC when it was worth $2,500,000, in exchange for a 10 percent capital and profits interest. Counterpart's strategy is to hold land for investment purposes only and then sell it later at a gain. Issue 1. If Counterpart sells the property for $3,000,000 four years after Howard's contribution, how much gain or loss is recognized and what is its character? [Hint: See IRC 5724.] Issue 2. If Counterpart sells the property for $3,000,000 five and one- half years after Howard's contribution, how much gain or loss is recognized and what is its character