Problem:
Mr. Tucker owns investment land (690,000 fmv and $228,000 adjusted basis) that he is interested in selling. Several prospective purchasers have offered to pay cash, but Mr. Tucker wants to avoid recognizing his entire gain in the year of sale. Accordingly, he is considering selling the land to the Tucker Family Corporation in return for a 20-year, 9% corporate debt obligation. The corporation could then sell the land to an unrelated party for cash. Will Mr. Tucker's strategy be effective in deferring gain in recognition on sale of the land?