Assume that A values his house at $90,000. B is willing to pay $110,000 for A’s house in order to relocate closer to work. After signing a contract, B’s employer announces that the company will move to another city. In view of this fact, the value of the house to B is reduced to $75,000. From an efficiency viewpoint, who should own the house, A or B? How will the parties achieve efficiency in allocating the house if the court enforces the contract?

Assume that A values his house at $90,000. B is willing to pay $110,000 for A’s house in order to relocate closer to work. After signing a contract, B’s employer announces that the company will move to another city. In view of this fact, the value of the house to B is reduced to $75,000. From an efficiency viewpoint, who should own the house, A or B? How will the parties achieve efficiency in allocating the house if the court enforces the contract?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 36P

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