Purchasing property below FMV - Do I have to recognize a gain?

[Greg Rusianoff]

I often buy properties in tax sales and sometimes I get properties at really good values. I could turn around and sell them quickly at a good profit. So technically I'm buying them below their Fair Market Value (FMV).

My new accountant tells me that if I buy a property below FMV, then have an appraisal or CMA done on it, I have to recognize a gain in that year, even if I don't sell the property. I have a hard time believing this, because I was under the impression that unless the gain is somehow realized (like when I sell), then it is not taxed.

For example, I bought a piece of land in a good area with 2 houses on it for $24,000. My appraiser comes in and tells me it's worth $124,000. Does that mean I have to recognize a $100,000 gain even if I don't sell it?