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    Trust Donation

    Trust is donating 20 acres of land to the school district to build a new school. The basis of the land at time of donation is $40,000.
    Part of the agreement of this donation says the trust must make certain land improvements worth $2 million. The school is paying the trust this $2 mil and the trust pays the contractors.
    My question is: The donation is $40,000 and the capital gain is $0, right? Trust received this money, but in turn paid it out for improvements.
    Noel
    "Some cause happiness wherever they go; others, whenever they go."- Oscar Wilde
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